[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"doc-detail-110230-en":3,"doc-seo-110230-105":29,"detail-sidebar-cat-0-en-105":91},{"code":4,"msg":5,"data":6},0,"success",{"doc_id":7,"user_id":8,"nickname":9,"user_avatar":10,"doc_module":4,"category_id":11,"category_name":12,"doc_title":13,"doc_description":14,"doc_content":15,"file_id":16,"file_url":17,"file_type":18,"file_size":19,"view_count":20,"is_deleted":4,"is_public":20,"is_downloadable":20,"audit_status":20,"page_count":21,"language":22,"language_code":23,"site_id":24,"html_lang":23,"table_of_contents":25,"faqs":26,"seo_title":13,"seo_description":14,"update_tm":27,"read_time":28},110230,16904993612988,"Olivia Brown","https://ap-avatar.wpscdn.com/davatar_a8503ba1806abce46bf441b54a3ca4cd",8,"Research & Report","Zambia: Joint Bank-Fund Debt Sustainability Analysis - Overall debt distress","Zambia remains in debt distress, with external arrears accumulating through 2022 to about 11½ percent of GDP. Despite fiscal adjustment, debt is assessed as unsustainable under the baseline, and all four external debt burden indicators breach thresholds by large margins. The analysis considers official bilateral creditor treatment under the G20 Common Framework and parallel comparable terms for commercial creditors; under this alternative scenario, debt sustainability can be restored. Key DSA coverage includes public, publicly guaranteed, and specific non-guaranteed SOE debt elements, plus SDR allocation treatment.","Public Disclosure  \nPub lic Disc losure Authorized  \nApproved by:  \nAsad Alam and Manuela Francisco (IDA); Costas Christou and Jarkko Turunen (IMF)  \nPrepared by the staff of the International Development Association (IDA) and the International Monetary Fund (IMF) .  \n\n| ZAMBIA: JOINT BANK-FUND DEBT SUSTAINABILITY ANALYSIS |  |\n| --- | --- |\n| Risk of external debt distress | In debt distress |\n| Overall risk of debt distress | In debt distress |\n| Granularity in the risk rating | Unsustainable |\n| Application of judgment | No |\n\nZambia remains in debt distress. The accumulation of external arrears continued in 2022 and reached 11 ½ percent of GDP. Despite significant fiscal adjustment, in the absence of a signed agreement on a deep debt restructuring, Zambia is in overall and external debt distress, and public debt remains unsustainable. Under the baseline, all four external debt burden indicators would breach their indicative thresholds by large margins through the medium term.1 The authorities have reached an agreement with official bilateral creditors on a debt treatment under the G20 Common Framework and are in ongoing discussions towards signing an MOU. They also have a credible restructuring strategy in place to treat commercial creditors on comparable terms. Under an alternative scenario, where the treatment agreed with the official bilateral creditors is applied to the baseline, and commercial claims are treated on comparable terms, debt would be assessed to be sustainable.  \n1 Zambia’s debt-carrying capacity is currently rated as weak based on the composite indicator (CI) . The composite indicator is calculated using data from the April 2023 WEO and the latest available 2021 CPIA.  \n1. The coverage of Zambia’s public and publicly guaranteed (PPG) debt for the purpose of the DSA includes the following: i) central government domestic and external debt, including $1.5 billion of arrears to external suppliers (fuel and contractors) and central government guaranteed external debt; ii) the nonguaranteed external debt of Zambia Electricity Supply Company (ZESCO), the fiscally important state-owned utility;2 and iii) the domestic and external arrears of the same enterprise. Central bank external debt (including outstanding Fund credit), together with the debt of social security funds guaranteed by the central government,3 are also included in the coverage.  \n2. The DSA incorporates non-guaranteed SOE debt in the baseline. In accordance with the LICDSF Guidance Note, given the significant fiscal risks posed by ZESCO, its non-guaranteed external debt ($93 million at end-2022)4 and outstanding payables to domestic ($1 .33 billion at end-2022) and external ($139 million at end-2022) independent power producers (IPPs), are included in the DSA perimeter. The authorities are taking steps to restore ZESCOs’ financial viability over the medium term. As progress is made, the inclusion of its non-guaranteed debt in the DSA debt perimeter will be reassessed. The authorities reported no other outstanding non-guaranteed external debt of nonfinancial SOEs that staff consider to pose a contingent fiscal risk warranting inclusion in the DSA. Local governments in Zambia currently do not have the capacity to borrow without the central government’s guarantee. The authorities confirmed that no extrabudgetary funds with outstanding debt currently exist.  \n3. The 2021 General SDR allocation has been incorporated into the DSA in line with the staff guidance note.5 The authorities are using the SDR allocation (approved by the IMF in August 2021) to finance the budget over 2022-24;6 in line with their plans, they used 50 percent of the allocation, and planto use 25 percent in each of 2023 and 2024.  \n4. The DSA is conducted on a residency basis. In line with the LIC-DSF Guidance Note, while recognizing the underlying measurement challenges, nonresident holdings of domestic-currency debt (as recorded by the authorities) are treated as external debt fo","cbCaisE8MiDYPQyc","https://ap.wps.com/l/cbCaisE8MiDYPQyc","pdf",933375,1,24,"English","en",105,"# Risk assessment\n## Debt distress outcomes\n## Baseline vs alternative scenarios\n## Application of judgment and granularity\n# DSA coverage and assumptions\n## Public and publicly guaranteed debt scope\n## Incorporation of non-guaranteed SOE debt\n## SDR allocation treatment\n## Residency basis and externalization of holdings","[{\"question\":\"What is Zambia’s debt status in the joint Bank-Fund analysis?\",\"answer\":\"Zambia is assessed as being in debt distress, with overall and external debt distress under the baseline.\"},{\"question\":\"Why does the baseline indicate unsustainable debt?\",\"answer\":\"External arrears continued in 2022, and the four external debt burden indicators breach their indicative thresholds by large margins through the medium term.\"},{\"question\":\"How would the debt outlook change under the alternative scenario?\",\"answer\":\"If the official bilateral creditor treatment is applied to the baseline and commercial claims receive comparable treatment, debt would be assessed as sustainable.\"}]",1784484473,60,{"code":4,"msg":30,"data":31},"ok",{"site_id":24,"language":23,"slug":32,"title":13,"keywords":33,"description":14,"schema_data":34,"social_meta":86,"head_meta":88,"extra_data":90,"updated_unix":27},"zambia-joint-bank-fund-debt-sustainability-analysis-overall-debt-distress","",{"@graph":35,"@context":85},[36,53,68],{"@type":37,"itemListElement":38},"BreadcrumbList",[39,43,47,50],{"item":40,"name":41,"@type":42,"position":20},"https://docshare.wps.com","Home","ListItem",{"item":44,"name":45,"@type":42,"position":46},"https://docshare.wps.com/document/","Document",2,{"item":48,"name":12,"@type":42,"position":49},"https://docshare.wps.com/document/research-report/",3,{"item":51,"name":13,"@type":42,"position":52},"https://docshare.wps.com/document/zambia-joint-bank-fund-debt-sustainability-analysis-overall-debt-distress/110230/",4,{"url":51,"name":13,"@type":54,"author":55,"headline":13,"publisher":57,"fileFormat":60,"inLanguage":23,"description":14,"dateModified":61,"datePublished":62,"encodingFormat":60,"isAccessibleForFree":63,"interactionStatistic":64},"DigitalDocument",{"name":9,"@type":56},"Person",{"url":40,"name":58,"@type":59},"DocShare","Organization","application/pdf","2026-07-22","2026-07-19",true,{"@type":65,"interactionType":66,"userInteractionCount":20},"InteractionCounter",{"@type":67},"ViewAction",{"@type":69,"mainEntity":70},"FAQPage",[71,77,81],{"name":72,"@type":73,"acceptedAnswer":74},"What is Zambia’s debt status in the joint Bank-Fund analysis?","Question",{"text":75,"@type":76},"Zambia is assessed as being in debt distress, with overall and external debt distress under the baseline.","Answer",{"name":78,"@type":73,"acceptedAnswer":79},"Why does the baseline indicate unsustainable debt?",{"text":80,"@type":76},"External arrears continued in 2022, and the four external debt burden indicators breach their indicative thresholds by large margins through the medium term.",{"name":82,"@type":73,"acceptedAnswer":83},"How would the debt outlook change under the alternative scenario?",{"text":84,"@type":76},"If the official bilateral creditor treatment is applied to the baseline and commercial claims receive comparable treatment, debt would be assessed as 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