An IMF spokesperson said on Thursday that Zambia, which signed a preliminary agreement in June to restructure a portion of its debt, is close to finalizing a memorandum of understanding with its creditors but it is not yet fully finalized.

"An agreement on the memorandum of understanding is almost finalized and signing is expected soon. ", said this spokesman for the institution, whose Managing Director Kristalina Georgieva had previously prematurely announced a signature.

At an earlier round table discussion organized in conjunction with the annual meetings of the International Monetary Fund (IMF) and the World Bank, which are taking place till Sunday in Marrakech (Morocco), Mrs. Georgieva announced that the deal "has finally been signed."

The agreement had not yet been finalized, and the signature was anticipated for next week, according to a source familiar with the situation who spoke to AFP.

The G7 finance ministers urged for "the finalization of the memorandum of understanding on the restructuring of Zambia's debt as quickly as possible" in the communiqué that concluded their talks on Thursday in Marrakech.

This marks the final step in validating the agreement in principle inked in June for the restructuring of $6.3 billion in external debt. This restructuring was one of the stipulations outlined by the IMF in its agreement detailing the aid program with Zambia, aimed at unlocking all disbursements.

Zambian Finance Minister Situmbeko Musokotwane expressed gratitude to all creditors, saying, "All our creditors have been wonderful; thank you all for giving us this opportunity." He also reflected on the embarrassment of being mired in a debt crisis situation.

Nonetheless, he stressed that such an agreement alone is insufficient to provide the quality of life that young Africans aspire to. He emphasized the need for "better growth that creates jobs, so that we no longer have young people attempting perilous journeys across the Sahara and the Mediterranean."

Zambia's debt, which has ballooned in recent years, is estimated at $32.8 billion, with $18.6 billion owed to foreign creditors, particularly China, its primary lender.

In 2020, Zambia became the first African nation to default on its debt, triggered by the onset of the Covid-19 pandemic.

The former president of Zambia, Edgar Lungu, is accused of embarking on substantial infrastructure projects and overextending the country's indebtedness to China (amounting to $4.1 billion). These projects include airports, roads, schools, factories, and even police stations in the country.

Finance Minister Musokotwane explained, "If you combine what we spend on salaries for our public servants and the servicing of this debt, it represents over 90% of the taxes collected. Now that we've got help, we can concentrate the money on the most vulnerable."

Zambia had secured a $1.3 billion aid program with the IMF in August 2022 and successfully completed the first review in July, allowing the IMF to monitor the implementation of the reforms outlined in the program.