Transcript of African Finance Minister's Press Conference

IMF News, October 14, 2023

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Zambia: Agreement reached with members of the Official Creditors on the Memorandum of Understanding (MoU) to formalize understanding reached with creditors in June.
- Next step: signing bilateral agreements based on the MoU between members of the Official Creditors and the Republic of Zambia.
- Official Creditors Committee (OCC) members cited: China, France, South Africa (Deputy Chairperson referenced).
Chad: Restructuring undertaken under the G20 framework; described as a pari passu restructuring involving official and private creditors.
- Outcome described: “Now our debt has become sustainable.”
- Debt servicing timetable was extended and interest rates were lowered in prior negotiation rounds; restructuring aimed to make payments fit the macroeconomic profile and oil price volatility.
Key referenced terms from coverage and questions:
- Reported earlier reduction in present value terms for Zambia “around 40 percent” (questioner reference).
- Reported extension of maturity “all the way to 2043” (questioner reference).
Commercial creditors:
- Zambia: “Heavily engaged” with private/commercial creditors; progress on Official Creditors expected to leverage private creditor discussions.
- Chad: Progress contingent on oil price trajectory; improved prices reduce debt burden and could enable repayment of commercial debt.

Zambia:
- Minister’s correction: engagement-to-financial-assurance took “nine months” (contrasting a questioner’s “three years” phrasing).
- Lessons emphasized:
- Early engagement when vulnerable to debt is recommended.
- Full acceptance and transparency about the problem is critical.
- Establish and demonstrate credibility to creditors, donors, and citizens by committing to self-help reforms and fiscal constraints (including legislative limits on future borrowing).
- Reprioritization of spending toward social services (example: education) and removing unsustainable subsidies (example: fuel) to free resources.
Chad:
- Negotiations took “18 months” (Minister’s account).
- Lesson: restructuring needs to be robust to commodity price swings; contracts reorganized so debt service is manageable even if oil prices fall.

Chad:
- Growth trajectory cited by questioner and Ministers: “from 2.1 percent in recession to plus 2.5 percent in 2022 and now we are looking at 4 percent growth.”
- Debt-to-GDP ratio referenced by Minister Nguilin: “about 25 percent, probably even less.”
Zambia:
- Debt sustainability analysis and macro projections anchor creditor discussions; specific numeric terms of agreements were not disclosed by the Minister in the briefing.
- Earlier referenced negotiation outcomes (questioner mention): “reduction in present value terms of the debt by around 40 percent,” maturity extension “to 2043,” and “a pretty significant reduction in interest rates” — Ministers indicated fundamentals and DSA principles guided terms but did not present detailed figures on-stage.

Zambia policy priorities described by Minister Musokotwane:
- Use debt restructuring as a steppingstone, not an endpoint—complemented by domestic reforms to attract private investment.
- Push to attract private finance to exploit natural resources: copper, nickel, manganese, lithium, cobalt, and land.
- Promote value addition (processing and manufacturing) to increase jobs, taxes, and imports capacity.
- Fiscal and legal reforms to constrain future unsustainable borrowing (Parliamentary measures to “tie my hands”).
- Reprioritization of public spending to education and social services; end fuel subsidies to free fiscal space.
- Infrastructure provision (roads, power, water) to enable private large-scale agricultural investment and irrigation to mitigate El Niño risks.
Chad policy priorities described by Minister Nguilin:
- Improve business climate, increase revenue, and strengthen public financial management.
- Restructure debt to be countercyclical and compatible with oil price volatility.
- Reduce interest rates and cap amounts due in short windows to smooth payments and improve sustainability.

Zambia:
- Plans to issue or facilitate green bonds discussed as part of a greener economy policy.
- Green bonds: private sector issuance encouraged; fiscal or tax incentives provide encouragement for issuing and buying green bonds.
- Agricultural strategy to mitigate potential El Niño impacts:
- Invest in water capture and irrigation infrastructure in the 2024 budget and prior years.
- Open large “farm blocks” with infrastructure to attract domestic and foreign private agricultural investment.
Climate framing:
- Ministers framed natural-resource-based value addition (minerals for decarbonization) as Africa’s contribution to climate solutions.
- COP28 expectations: Ministers sought opportunities for investment and emphasized focusing on opportunities (investment, land, water, power) rather than only vulnerability narratives.

Transcripts and follow-up:
- IMF to make transcript available on www.imf.org and media follow-up via media@IMF.org (as stated by moderator at close).
Transparency and speed of multilateral processes:
- Note from Ministers: recognition that some multilateral processes “take too long” (President Banga of the World Bank referenced), and a desire for quicker delivery of project financing and support.

Transcript: African Finance Minister's Press Conference, October 14, 2023 — IMF Communications Department