TWO years after Zambian Government asked the then IMF representative Alfredo Baldini to leave the country, the Fund has appointed a new representative, rising hope that the international lending institution could finally suction the long awaited bailout financial package.
The sucking of Mr Baldini from the country marked a low point in the Zambia, IMF relations that has seen government fail to obtain a loan from the Fund since 2016 because of concerns over the country’s borrowing.
The Fund has appointed Preya Sharma, a special assistant to the director of the lender’s Africa department, as the new country representative to Zambia.
Bloomberg reports that Lusaka-based consultancy Premier Consult chief executive officer Oliver Saasa said that Mr Sharma’s appointment is long overdue and “brings a certain ray of hope” to the government’s plan to get IMF financing.
“It doesn’t bring a reprieve to the government. It just means that the doors aren’t entirely closed,” Prof. Saasa said.
However, IMF Africa department Director Abebe Aemro Selassie said that the approval of a new program hinges on the government’s commitment to implement policies to tackle economic imbalances.
The IMF held discussions with the Zambian government and Mr Abebe met Finance Minister Bwalya Ng’andu during the lender’s virtual annual meetings last week.
Zambia is trying to convince bondholders to accept a debt-service holiday and skipped a coupon payment last week, moving closer to becoming the first African nation to default on dollar bonds since the onset of the coronavirus pandemic.
That resulted in S&P Global Ratings cutting its assessment of Zambia’s debt to selective default.