The managing director of the International Monetary Fund (IMF), Kristalina Georgieva, announced on Thursday that the memorandum of understanding between Zambia and its debt creditors has finally been signed.

"The Zambian government is very good, but it is mired in the debts of the past, and the memorandum of understanding has finally been signed," announced the director of the Fund at the start of the debate on "Priority Reforms to Deal with Debt", which took place yesterday at the annual meetings of the International Monetary Fund and the World Bank, which are taking place this week in Marrakech.

"Debt servicing, the cost of servicing (paying) the debt has doubled, and it has been hit because international support has stagnated, which is why the World Bank and the IMF are asking for more resources so that we can increase aid in concessional terms," said Kristalina Georgieva, quoted by Lusa.

Some 201% of emerging markets are in a situation of over-indebtedness and another 191% are close to it, the IMF leader warned.

On the same panel, the president of the World Bank said that "sub-Saharan Africa is paying 7.6% of GDP to pay the cost of debt, when in comparison what they spend on Education and Health together is 6.5% of GDP", warning that this level of debt "prevents public investment in human capital, infrastructure, Health and Education".

Zambia, one of the world's leading copper producers, defaulted on its foreign debt at the start of the pandemic, and was the first African country to fall into financial default due to the impact of covid-19, and has since become an example of what can happen to a country in financial difficulties that wants to restructure its debt with creditors.

The country has joined the G20's "Common Framework" for restructuring the debt of the poorest states, hoping for an agreement between their creditors, so far without success, with China being criticized for its reluctance to join the process, arguing that it prefers to deal with each country bilaterally.

The IMF has approved a program with a loan of 1.3 billion dollars in 2022 to help Zambia restore fiscal stability, and is awaiting the agreement of creditors to go ahead with the disbursement of 188 million dollars in the first review of this Extended Credit Facility (ECF).

The main obstacle to the restructuring process was the reluctance of private creditors to accept losses, which would mean that they would either bear the costs or pass them on to investors.