Zambia says IMF has not asked for independent debt audit

LUSAKA (Reuters) - The International Monetary Fund (IMF) has not requested Zambia undertake an independent debt audit following market speculation that its foreign debt may be higher than stated, the country’s finance minister said on Friday.

Zambia, Africa’s second-biggest copper producer, has held talks with the IMF over an aid program but the fund rejected the country’s debt management plans in February.

“There have been insinuations in some quarters that the IMF requested the Zambian government to carry out an independent audit of its debt. We are not aware of such a request,” Finance Minister Margaret Mwanakatwe said in a statement.

She added: “Suffice to say, we have never been requested by any entity, including the IMF, to conduct such an exercise.”

Zambia said on Wednesday its $8.7 billion foreign debt has not been understated and those saying it is higher should produce evidence.

Mwanakatwe said Zambia has not defaulted on any of its eurobond interest payments, nor has it defaulted on any of the debts from China.

She said restructuring of Chinese debt was an option that was open and will be undertaken as and when the need arises.

“We cannot foretell market conditions in the period 2021 to 2027, however, we are keen to put in place a more robust and smoothened cash flow in our debt sustainability strategy,” Mwanakatwe said.

Speculation that Zambia has higher foreign debt than stated spooked investors at a time debt-ridden Mozambique is struggling to repay loans of more than $2 billion that were not approved by parliament.

The discovery in 2016 of the undisclosed loans prompted the IMF and foreign donors to cut off support to Mozambique, triggering a currency collapse and leading to a default.

Reporting by Chris Mfula; Writing by Olivia Kumwenda-Mtambo; Editing by Toby Chopra