JOHANNESBURG (Reuters) -The International Monetary Fund's executive board has approved an immediate $189 million disbursement to Zambia following its first review of a $1.3 billion loan programme, the IMF said on Thursday.
The IMF board meeting came after Africa's second-biggest copper producer clinched a deal last month with governments abroad including China to rework about $6.3 billion of its overseas debt.
"Swift finalization and signature of the Memorandum of Understanding with the OCC (Official Creditor Committee) will be important," said IMF Managing Director Kristalina Georgieva in a statement.
"Timely implementation of this agreement, together with agreements with private creditors on comparable terms, should restore Zambia's debt sustainability over the medium term," she added.
Zambia was the first African country to default on its sovereign debt during the COVID-19 pandemic and faced lengthy delays in restructuring negotiations.
The IMF said that Zambia's performance under the support programme had been strong, and that all quantitative performance criteria for the first review had been met.
The Fund now sees Zambia's total public debt falling to 88.5% of gross domestic product (GDP) by the end of 2026 from about 110% of GDP at the end of this year.
Although Zambia's economic growth is projected to moderate to 3.6% in 2023, it is expected to accelerate to 4.3% in 2024 and settle at around 5% per year over the medium term, the IMF said.