Zambia and France signed a bilateral debt restructuring agreement, a key step in a protracted process that started when the southern African nation defaulted four years ago, Bloomberg News reported. The deal is part of Zambia’s efforts to revamp about $13 billion in external debt after it became the first African nation to default during the Covid-19 pandemic in 2020. “Three years ago, Zambia was a basket case,” Zambian Finance Minister Situmbeko Musokotwane said at the signing ceremony on Sunday in Lusaka, the capital.

Zambia’s proposed ban on charging foreign currency in local transactions — punishable with 10-year jail terms — might defeat its own purpose, according to the International Monetary Fund, Bloomberg News reported. The central bank of Africa’s second-biggest copper producer in June unveiled the plans to curb increasing dollarization in the economy that it said blunts its tools to fight inflation. Businesses have already pushed-back on proposed regulations calling them “punitive” and warning that they may actually fuel price growth.

Zambia has finally ended nearly four years of default on its dollar bonds, issuing two series of restructured notes that were the product of intense negotiations, Bloomberg News reported. The southern Africa nation became the first in Africa to renege on its obligations during the pandemic in November 2020, setting the stage for what would become a complex restructuring fraught with setbacks.

Zambia is set to receive an extra $388 million from the International Monetary Fund as soon as this month to help the southern African nation deal with its worst drought in at least four decades, Bloomberg News reported. The Washington, D.C.-based lender’s staff reached a deal with the government on the third review of an existing $1.3 billion economic program, as well as a request to augment it to about $1.7 billion, the IMF said in an emailed statement Tuesday.

The International Monetary Fund on Thursday said that discussions with Zambia over the third review of its loan package were focused on the impact of its drought and "difficult financing conditions," Reuters reported. The staff level agreement would unlock the next tranche of money from Zambia's $1.3 billion three-year loan. The country is in the midst of a punishing drought that has impacted and is also in the final stages of reworking its debt after a 2020 default. Read more.

Zambia has made good progress in concluding a marathon debt restructuring and is confident of soon striking agreements with its remaining creditors, Bloomberg News reported. “We expect the deal to be done in months,” said Finance Minister Situmbeko Musokotwane. “I am very confident that we have made a lot of progress,” he said on Tuesday. Africa’s second-biggest copper producer — which in 2020 became the continent’s first pandemic-era defaulter — has so far struck deals to revamp $10.1 billion of its liabilities, including with official creditors and eurobond investors.

Zambia is close to reaching debt restructuring deals with some of its remaining commercial creditors following agreements with official lenders and bondholders, said Felix Nkulukusa, secretary to the Treasury, Bloomberg News reported. Africa’s second-biggest copper producer — which in 2020 became the continent’s first pandemic-era defaulter — has so far struck deals to revamp $10.1 billion of its liabilities, with $3.3 billion remaining, he said Wednesday in a speech in Lusaka, the capital.

A group of Zambia's international bondholders has signed a non-disclosure agreement with the government to discuss a $3 billion debt restructuring proposal, three sources familiar with situation said on Tuesday, Reuters reported. The government sent a formal debt rework proposal to the steering committee of the creditor group last week, two of the sources said. Entering into a non-disclosure agreement usually marks the start of formal restructuring talks.

Zambia's central bank raised its benchmark lending rate for the fifth meeting in a row, it said on Wednesday, citing a further deterioration in the inflation outlook, Reuters reported. The bank raised its policy rate by 150 basis points to 12.5%. Inflation in the southern African country rose to 13.2% year-on-year in January from 13.1% in December, moving further away from the bank's 6%-8% target band. Inflation is expected to average 12.5% this year, Bank of Zambia Governor Denny Kalyalya told reporters.

Zambia’s dollar debt plunged after official creditors co-led by China and France rejected a revised bondholder restructuring proposal, stalling the revamp of $3 billion of outstanding notes, Bloomberg News reported. The development, which calls into question a Group of 20 plan to help poor countries overhaul unsustainable loans, comes after Zambia last month reached a memorandum of understanding with official creditors to restructure $6.3 billion of debt. It needed to receive at least as favorable treatment from private creditors under the G20’s Common Framework guidelines.