IMF Denies Asking Zambia for Independent Audit of Its Debt

LUSAKA (Capital Markets in Africa) – The International Monetary Fund denied asking the Zambian government to undertake an independent audit of its foreign debt.

The Washington-based lender also didn’t release any estimate of Zambia’s debt to donors, resident representative Alfredo Baldini said Monday in an emailed response to questions.

Nomura International Plc economist Peter Attard Montalto said in a March 27 note the IMF had requested that Zambia’s government undertakes an independent audit of its foreign debt. Montalto didn’t immediately respond to an email on Monday seeking comment.

Zambia is still hoping to secure a $1.3 billion IMF loan to boost its foreign-exchange reserves that fell to a seven-year low in November. The IMF already turned down the southern African nation’s borrowing plans twice and said in October Zambia is at high risk of debt distress.

Finance Minister Margaret Mwanakatwe told reporters on April 6 the government is carrying out a debt sustainability exercise ahead of talks with the lender. Zambia’s external debt rose to $8.7 billion at end-December from $7.6 billion at the end of August, she said.

The country will complete the exercise this week, Mukuli Chikuba, permanent secretary at the Ministry of Finance, said in comments broadcast over state-owned ZNBC TV Sunday.

“It will define a clear path which we think will be sustainable in terms of the extra borrowing we will be doing,” he said. “The issue is, going forward, what do you borrow, what don’t you borrow. And that is the discussion we have been having with the IMF. What we’ve said is: give us time, we’ll pull back.”

Source: Bloomberg Business News