Ng’andu Targeting IMF Deal Before August Elections

Finance Minister Bwalya Ng’andu has said the government is expecting to secure a loan from the International Monetary Fund (IMF) before Zambians heads to the polls for elections in August.

Speaking in an interview with Bloomberg, Mr Ng’andu said “We want a deal… There is absolutely no desire on our part that we delay things to election time and we are hopeful that we’ll be able to reach some agreement with the IMF”. 

The government hopes the loan will set the agenda for debt-restructuring talks with external creditors, after Zambia officially entered into default on its Eurobond payments last November. 

Bondholders have specified that any restructuring would be contingent on Zambia securing a loan from the IMF, but have previously expressed doubts that it could be done before the elections. 

Contrary to Mr Bwalya’s optimism, economists including Neville Mandimika of South Africa’s Rand Merchant Bank do not think that a deal will be likely before November, as the fiscal adjustments that the IMF will require may be difficult to sell ahead of an election.

Zambia currently owes roughly $12 billion in external debts, a quarter of which is owed to bondholders. The government has continually failed to restructure its debs after unsuccessfully applying to creditors for a freeze on interest payments last September.

The Zambian government is due to hold virtual meetings with officials from the IMF from February 11 in order to discuss the nation’s debt and a possible extended credit facility.  

However, the IMF has already criticised the government’s decision to increase fuel subsidies and take on an additional $1.5 billion of loans in order to buy the Mopani Copper Mine from Glencore. Ng’andu maintains that these will not be dealbreakers.

“The impression that I get speaking to them is that they are very co-operative, they want to be party to the process,” the finance minister said.