Zambia tries to convince the World Bank and the IMF to launch a bailout for its economy

Present in Washington for the United Nations General Assembly, Zambian President Hakainde Hichilema also met representatives of the IMF and the World Bank. With them, he discussed reforms for his country and a backup plan to turn around the economy in dire straits.

One of Hakainde Hichilema’s major challenges is to regain control of a recessive economy and reduce the external debt which has reached the $ 12 billion mark. In office since late August, the Zambian president met with World Bank and IMF officials in Washington on the sidelines of the UN General Assembly on September 21.

Returning, he announced on September 30 that he was working on a bailout. The situation is worrying for the second African copper producer, hit by the crisis linked to the Covid pandemic. Real GDP shrank 4.9% in 2020, with public debt at 104%.

The African Development Bank explains these unsustainable levels by an expansionary fiscal policy, financed by debt, under the governance of Edgar Lungu. Two bond interest payment deadlines were missed. The head of state pledged to make the country credible again in the eyes of financial institutions.

“We explained to them our approach to running the country, and guaranteed that things would be different,” he said. IMF experts have just completed a 5-day visit to the country to assess the reformist economic policy undertaken by the government.