By Jorgelina do Rosario and David Lawder
(Reuters) -The executive board of the International Monetary Fund on Wednesday approved a $1.4 billion extended credit facility programme for Zambia, a source with direct knowledge told Reuters.
Zambia’s creditors led by China and France pledged in late July to negotiate a restructuring of the country’s debts, a move that IMF Managing Director Kristalina Georgieva welcomed as “clearing the way” for a $1.4 billion Fund program.
In 2020, Zambia became the first African country in the pandemic era to default. The restructuring of its external debt, which amounted to more than $17 billion at the end of 2021, is seen by many analysts as a test case for the region.
It is one of three southern African countries, along with Chad and Ethiopia, that have sought restructuring under a G20 common debt restructuring framework.
Zambia reached a staff-level agreement with the IMF on a $1.4 billion three-year extended credit facility in December, conditional upon its ability to reduce debt to levels the Fund deems sustainable.
(Reporting by Jorgelina do Rosario and David Lawder; Additional reporting by Rodrigo Campos; Editing by Richard Pullin)
