Zambia seeks IMF funding to help soften impact of coronavirus

Zambia has applied to the International Monetary Fund (IMF) for a COVID-19-related rapid credit facility as it starts the process of shortlisting financial advisers to help reduce its debt load, the finance ministry said on Sunday.

Zambia was already wrestling with a growing public debt even before the new coronavirus outbreak forced lockdowns across the globe, delivering a big blow to demand for raw materials. Zambia is Africa’s second biggest copper producer.

Discussions with the IMF on the rapid credit facility are continuing, the finance ministry said in a statement.

Zambia has also closed a call for tenders for financial advisers over its debt and started the process of shortlisting and selecting the winner, it said in the same statement.

The IMF in April forecast Zambia’s economy would contract by 3.5% in 2020, down from growth of 1.5% in 2019, because of the impact of the coronavirus pandemic on the global economy.

Zambia’s economic activity has also been hampered by widespread power shortages.

The Zambian government’s external debt stock jumped to 45% of gross domestic product (GDP) in 2019, up from 37% in the previous year, while the total debt stock is estimated at 89%, according to World Bank data.

The IMF has approved requests for emergency pandemic aid from 50 of its 189 members for a total of about $18 billion, a spokesman for the Fund said on Thursday.

The number of new coronavirus cases in Zambia rose to 252 on Saturday and deaths from the highly infectious respiratory disease increased to seven, Health Minister Chitalu Chilufya said.