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DEAL WITH ZAMBIA MAY BE REACHED IN WEEKS, BUT NOT THERE YET – IMF

THE International Monetary Fund (IMF) says it hopes to reach a deal with the Zambian government in the next few weeks but that will depend on agreeing on the parameters of the program.

IMF Africa Director Abebe Aemro Selassie however told Bloomberg that the two parties are yet to agree on certain parameters.

Talks that began last year are continuing, and the Washington-based lender aims to conclude them “in the next few weeks.”

“I hope we can move forward by reaching agreements, and get broad endorsements of political leaders. But that will depend on agreeing on the parameters of the program, and we are not just there yet,” he said.

The IMF still hopes to reach a deal with Zambia before elections in August on an economic program that will form the basis of the nation’s planned debt restructuring.

The timeline is tight. While the polls that will probably be closely contested are set for August 12, the constitution stipulates that parliament, and by extension President Edgar Lungu’s Cabinet, must dissolve about three months before that, suggesting a deal may need to be agreed by May 14.

And Zambia’s dollar bonds have risen.

Bloomberg reports that Zambia’s US$1 billion of Eurobonds due 2024 extended gains on Thursday, rising by as much as 1.6 percent to 59.14 cents on the dollar, the highest in more than a year.

Zambia last year became the continent’s first pandemic-era defaulter.

External commercial creditors, including those holding the nation’s US$3 billion of Eurobonds, want the Zambian government to reach a deal with the IMF, which they will then base their restructuring talks on.

Most observers only see it possible for the IMF to come to an agreement with the government once the elections, in which the ruling party’s Lungu will seek to win a second five-year term, are out of the way.

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