Zambia says first creditor meeting set for Thursday, IMF praises govt

LUSAKA, June 14 (Reuters) - Zambia will hold its first meeting with its international creditors on Thursday, finance minister Situmbeko Musokotwane said, but he acknowledged that the government's aim of concluding negotiations by the end of June no longer looked tenable.

"We are one step closer to debt resolution because those discussions are beginning this Thursday," Musokotwane told a media briefing on Tuesday.

In 2020, Zambia became the first pandemic-era sovereign default, buckling under a debt burden of more than 120% of gross domestic product (GDP), but its restructuring process has been delayed, with the government blaming creditors.

Later on Tuesday, IMF Deputy Managing Director Antoinette Sayeh praised the Zambian government for its economic reforms and said the fund was ready to support the country after creditors agree to what it deems necessary to make the debts sustainable.

"We are eagerly awaiting those assurances, which can only come from creditors," Sayeh said during a conversation with President Hakainde Hichilema in front of journalists at State House in Lusaka.

Zambia reached a staff-level deal on a $1.4 billion three-year extended credit facility with the IMF in December.

Hichilema said the government remains dedicated to resolving Zambia's debt problems and putting the economy back on track.

"We are committed to this path," Hichilema said.

"We are delighted that China is on board. I got confirmation from the Chinese head of state," he said.

Hichilema spoke with Chinese President Xi Jinping in a telephone call on May 31. read more

France, which hosts the Paris Club forum for international creditors, and China are co-chairs of the bilateral negotiations to restructure Zambia's external debt, which stood at $17.27 billion at the end of 2021, according to government data.

Last month, sources with knowledge of the process said China was holding up the debt relief discussions. China said it was ready to support Zambia with its debts. read more

China and Chinese entities held $5.78 billion of Zambia's debt at the end of 2021.

Musokotwane said he was hopeful the IMF programme would kick in after the creditor meeting on June 16 and that Zambia had been ready for the meeting since December, but creditors had their own issues which had now been resolved.

Musokotwane had previously repeatedly said he hoped the restructuring process would be done by the end of June, a timetable analysts had long deemed ambitious. read more

Reporting by Chis Mfula; Writing by Bhargav Acharya and Rachel Savage; Editing by Olivia Kumwenda-Mtambo, Alexander Winning, Susan Fenton, Alexandra Hudson

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