IMF Approves $1.3Bln Bailout for Debt-Ridden Zambia

Zambia became the first African nation in the pandemic era to declare a default, and by the end of 2021 its external debt had skyrocketed, reaching $17.3 billion.

The International Monetary Fund (IMF) approved a major bailout for Zambia on Wednesday. It grants $1.3 billion for a 38-month period in a bid to revive the economy of the nation following the blow from the COVID pandemic. The fund noted that the approval will also unlock an immediate disbursement of about $185 million.

IMF managing director Kristalina Georgieva posted a tweet congratulating the country's President Hakainde Hichilema, saying "we are proud to support Zambia's homegrown reforms and actions to help build a better future for all Zambians."

Zambian president elect Hakainde Hichilema addresses a press conference at his residence in Lusaka, Zambia, Monday Aug, 16, 2021. Hichilema has won the southern African country's presidency after defeating President Edgar Lungu with more than 50% of the vote.

© AP Photo / Tsvangirayi Mukwazhi

"Today's announcement will culminate in jobs for our people, a more affordable cost of living and enhanced development prospects for every province in our country. The international community has recognised the progress we have made and our commitment to reviving our economy and becoming a responsible member of the family of nations," Hichilema responded, addressing the decision.

The approval of the program comes as creditors, led by Paris and Beijing, in July agreed on restructuring Zambia's debt. The IMF noted that by the end of the year, a debt restructuring process would be launched, as the official creditor committee expects to agree on ways to provide debt relief for the African nation.

According to the president, who came to power last year, the situation was created by his predecessor Edgar Lungu, who was in charge of Zambia in 2015-2021.