STORY: Zambia took a crucial step closer on Wednesday (August 31) to restructuring its debts and rebuilding its ravaged economy.
The International Monetary Fund said in a statement that it had approved a $1.3 billion, 38-month loan program with the southern African country..
Zambia has suffered at the hands of economic mismanagement and COVID-19.
In 2020, it became the first pandemic-era sovereign default, buckling under a debt burden of more than 120% of GDP.
In late July creditors, led by France and China, pledged to renegotiate Zambia's debts.
That was welcomed by IMF Managing Director Kristalina Georgieva as "clearing the way" for the new IMF program.
On Wednesday, Georgieva said Zambia continues to face "profound challenges reflected in high poverty levels and low growth."
The Extended Credit Facility program, she added, would aim to restore macroeconomic stability and foster "higher, resilient and more inclusive growth".
The IMF said the funding arrangement is equivalent to 100% of Zambia's quota, or shareholding, in the Fund.
Wednesday's approval, the IMF said, will also unlock an immediate disbursement of about $185 million.