(Recasts with Zambia finance ministry statement, changes dateline to Lusaka, adds creditor comments)
LUSAKA, May 10 (Reuters) - Zambia’s finance ministry said on Monday that it had reached a broad agreement with the International Monetary Fund (IMF) on macroeconomic parameters, fiscal targets and policy objectives, during talks to secure a lending programme.
Both Zambia - Africa’s first pandemic-era sovereign default - and the IMF said more talks were needed to finalise a programme under the Fund’s Extended Credit Facility.
But the finance ministry said enough progress had been made to allow authorities to move ahead with preparations for debt restructuring talks with official and commercial creditors under a common framework backed by the Group of 20 major economies.
11 May 2021 - 08:13 By Chris Mfula Zambia s debt had been considered unsustainable even before the pandemic struck, and missing a coupon payment on a dollar bond in November tipped it officially into default. Image: 123RF/Kevin George
Zambia s finance ministry said on Monday that it had reached a broad agreement with the International Monetary Fund (IMF) on macroeconomic parameters, fiscal targets and policy objectives, during talks to secure a lending programme.
Both Zambia - Africa s first pandemic-era sovereign default - and the IMF said more talks were needed to finalise a programme under the Fund s Extended Credit Facility.
But the finance ministry said enough progress had been made to allow authorities to move ahead with preparations for debt restructuring talks with official and commercial creditors under a common framework backed by the Group of 20 major economies.
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LUSAKA, May 10 (Reuters) - Zambia s finance ministry said on
Monday that it had reached a broad agreement with the
International Monetary Fund (IMF) on macroeconomic parameters,
fiscal targets and policy objectives, during talks to secure a
lending programme.
Both Zambia - Africa s first pandemic-era sovereign default
- and the IMF said more talks were needed to finalise a
programme under the Fund s Extended Credit Facility.
But the finance ministry said enough progress had been made
to allow authorities to move ahead with preparations for debt
restructuring talks with official and commercial creditors under
a common framework backed by the Group of 20 major economies.
The International Monetary Fund (IMF) has approved new three-year financing arrangements for Kenya valued at $2.34 billion to help the African country continue to respond to the COVID-19 pandemic and address its debt vulnerabilities.
Approval of the new loans under the Fund’s Extended Credit Facility and Extended Fund Facility will enable immediate disbursement of about $307.5 million that Kenya can use for budget support, adding to $739 million it received in emergency COVID-19 aid in May 2020, the Fund said in a statement.
According to Reuters, the IMF said Kenya’s debt remained sustainable, but it was at high risk of debt distress, and authorities should focus their near-term agenda on urgent structural policy challenges.
It also faces huge budget deficits that have been deepened by the coronavirus crisis. The programme supported by EFF/ECF arrangements with the Fund provides a strong signal of support and confidence, IMF deputy managing director Antoinette Sayeh said in a statement. The Kenyan authorities have demonstrated strong commitment to fiscal reforms during this unprecedented global shock and Kenya’s medium-term prospects remain positive.
Kenya was hit hard at the onset by the Covid-19 pandemic, but its economy has been picking up after posting an estimated slight contraction of 0.1 per cent in 2020, the IMF said.
The fund is forecasting a sharp swing to growth of 7.6 per cent in 2021 and 5.7 per cent in 2022, but said Kenya continued to face challenges in the return to durable growth, and its past gains in poverty reduction had been reversed.