DEBT RELIEF DELAY The International Monetary Fund (IMF) this month praised the southern African copper producer for its economic reforms, but said it would only lend the country $188 million from an agreed loan programme if Zambia's bilateral creditors agreed on debt relief. The country is still working on a restructuring with both its bilateral creditors and private bondholders, but the talks have been dragging on amid a lack of consensus over how to provide the debt relief.
Many Western officials have blamed the delay on Zambia's largest bilateral creditor, China, and IMF chief Kristalina Georgieva recently told China it must speed up its work on restructuring agreements for countries like Zambia, Ghana and Ethiopia. In remarks published on Friday, People's Bank of China governor Yi Gang reiterated China's willingness to implement debt talks under the Common Framework, a process introduced by the G20 in 2020 that the three African countries are using. "Because of the sentiments in the market... we may start losing some of the gains that we have achieved so far," Zambia's Secretary to the Treasury Felix Nkulukusa said at an event at the IMF's Spring Meetings. "If we start losing some of those achievements... then we will have some despair or some pushback." While the recent gains for the kwacha may provide respite for some imported goods traders and their customers, the big currency swings are putting others out of business. "The instability in the exchange rate is killing us," said Killian Matangila, spokesman of the Zambia Motor Car Dealers Association, whose members import used Japanese cars. "Some players have moved out of the business because of these sharp fluctuations in either direction." The unfinished debt rework also means many overseas investors are staying on the sidelines, Michael Gonzales, U.S. Ambassador to Zambia, said in an interview in Lusaka earlier this month. "The prospective companies who are coming and saying 'We're really excited about this opportunity,' they're in many cases not leaving their cash on the table," he said. Once the debt situation is resolved, "investors will have significantly greater confidence that they can then put their money at risk and drive those investments forward." ($1 = 18.2000 Zambian kwachas) (Reporting by Rachel Savage and Chris Mfula; Editing by Hugh Lawson)