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Zambia to hold talks with IMF on programme from next month

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JOHANNESBURG, Jan 22 (Reuters) – Debt-laden Zambia will hold discussions with the International Monetary Fund (IMF) from Feb. 11 to March 3 on a formal relief programme, the Finance Ministry said on Friday.

Zambia had requested IMF support after becoming Africa’s first pandemic-era sovereign defaulter last year when it failed to make a payment on one of its bonds.

The ministry said the engagement with the fund would be under an Extended Credit Facility – providing financial assistance to a country with protracted balance of payments challenges, a situation Zambia is facing.

“The programme discussions will centre on the government’s objectives to attain fiscal and debt sustainability and on key pillars in the (economic recovery programme),” the ministry said in a statement signed by Secretary to the Treasury Fredson Yamba.

Although Zambia is a major copper producer, its debt stands at nearly 140% of its annual economic output.

The new comes days after Zambia’s mining investment arm, ZCCM-IH, agreed to take on $1.5 billion in debt for Glencore’s stake in Mopani Copper Mines, making it the sole owner of the mine.

Analysts had said the Mopani deal could compromise a drive for debt sustainability likely to be required as part of any support from the IMF, which said it had not been consulted about the deal. (Reporting by Olivia Kumwenda-Mtambo; Editing by Alison Williams)

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