Zambia 06.06.24

• Following a staff level agreement Zambia has unlocked $574mn in financial assistance following a severe drought. The review came about following a request from Zambia to increase the loan from the IMF from $1.3bn to 1.7bn. https://thepeninsulaqatar.com/article/04/06/2024/imf-to-unlock-nearly-600-million-for-drought-hit-zambia

• Fitch forecasts that the Bank of Zambia will keep its interest rates on hold in 2024 and cut in 2025. https://www.fitchsolutions.com/bmi/country-risk/bank-zambia-keep-interest-rates-hold-2024-cut-2025-16-05-2024

• The Chinese foreign ministry have announced that it is closely monitoring the negotiations on Zambia’s debt restructuring and they will take steps to support Zambia in dealing with any issues. https://www.africanews.com/2024/06/01/chinas-monitoring-progress-of-negotiations-on-zambias-debt-restructuring/

• Following a drop in dam water levels, the energy minister has announced further cuts to the countries power supply. Consumers now only have 12 hours of power a day. https://www.aa.com.tr/en/africa/zambia-further-cuts-4-hours-power-supply-leaving-consumers-with-only-12-hours-each-day/3230109#

• International bond holders are set to vote on their part of the debt restructuring this week. The restructuring is estimated to cut around $900mn from Zambia’s debt and spread its future payments over a longer period of time. https://www.reuters.com/world/africa/zambias-debt-restructuring-limps-over-line-painful-test-case-2024-06-04/

• A European centre for disease prevention and control expert has been deployed to Zambia to help contribute to the cholera outbreak response efforts. https://www.ecdc.europa.eu/en/news-events/ecdc-expert-deployed-zambia-contribute-cholera-outbreak-response-efforts

• The IMF has reduced the 2024 forecast for the country. GDP growth is now projected at 2.3%, half of the forecast from December 2023. https://www.imf.org/en/News/Articles/2024/06/03/pr-24202-zambia-imf-reaches-staff-level-agreement-on-the-3rd-review-of-the-ecf