Zambia hopes for IMF programme before end-June

Zambia expects to agree a deal with the International Monetary Fund in the first half of this year, Finance Minister Felix Mutati said on Friday.

He also told Reuters the country was unlikely to return to international bond markets before 2018.

The economy of Africa’s second-biggest copper producer has suffered from the steep commodity price drop of recent years. Last March, Zambia began talks with the IMF about a potential loan package after agreeing that its budget deficit was not sustainable, though formal talks have not yet been launched.

“We have a roadmap – stakeholder consultation including cabinet approval – and we hope that the deal can be consummated in the first half of the year,” Mutati said in an interview on the sidelines of investor meetings organised by the Business Council for Africa.

He said it was too early to put a precise number on how much Zambia was hoping to borrow from the IMF. Members of his delegation said it was expected to come in the form of an Extended Credit Facility (ECF), a programme which normally runs three years. Analysts reckon it could exceed $1 billion.

Mutati said financing needs in the 2017 budget amounted to $1.2-$1.3 billion.

His government had also very recently spoken to the African Development Bank, the World Bank and the European Union. “I can tell you without a doubt they are all enthusiastic to give us budget support,” he said.

Having also met with fund managers earlier in the week in London, Mutati said Zambia was unlikely to return to international debt markets in the near future.