The presidency and treasury did not respond to requests to clarify whether the Chinese government would now underwrite the loans from the firms or grant Zambia new loans.
It was the second time in less than six months that the IMF had rejected a Zambian proposal, causing the copper producer’s dollar-denominated bonds to fall across the curve on Friday.
“The decision was made before we restructured our Chinese loan,” presidential spokesperson Amos Chanda said, referring to the IMF rejection. Chanda said there was “no possibility of default” on current and future debt.
“We will not go to the ends of the earth to pursue an IMF programme. If it does not come, we will continue with our own programme, which is already delivering results,” Chanda said.
Zambia’s total public debt at the end of last August stood at $12.45bn, representing 47percent of gross domestic product.
The country issued Eurobonds worth $2.8bn between 2012 and 2015, and said it planned to refinance those bonds to cut the cost of debt servicing in a broad strategy to keep debt levels from spiralling.
“Our future engagement with the IMF will be anchored on investment in the social sector.
“What is best for Zambia is what the government has put across since November 2015,” presidency spokesperson Chanda said.
Earlier in the week president Edgar Lungu appointed new finance and mining ministers in a reshuffle affecting numerous other departments, heightening concerns over the country’s financial and political stability.