International Monetary Fund (IMF) logo is seen outside the headquarters building in Washington, U.S., as IMF Managing Director Christine Lagarde meets with Argentine Treasury Minister Nicolas Dujovne September 4, 2018. REUTERS/Yuri Gripas

LUSAKA, June 4 (Reuters) – The International Monetary Fund (IMF) said on Tuesday that Zambia’s government had asked for its $1.3 billion loan programme to be increased to $1.7 billion to help it respond to a severe drought.

The IMF also said in a statement that it had reached a staff-level agreement on the third review of the southern African country’s Extended Credit Facility.

Once the latest review is approved by IMF’s executive board at a meeting expected by the end of June, Zambia will have access to roughly $573 million, the fourth disbursement under the facility.

Zambia is one of a handful of African countries grappling with a drought induced by the El Niño weather phenomenon that has plunged parts of the region into hunger.

The copper-rich country is close to emerging from a debt-restructuring process beset by delays after more than three and a half years.

Zambia’s finance ministry said last week that more than 90% of holders of its $3 billion in outstanding international bonds had accepted a restructuring proposal.

Finance Minister Situmbeko Musokotwane said the staff-level agreement announced on Tuesday was “testament to Zambia’s determination to rebuild macroeconomic and debt sustainability” and its efforts to finalise restructuring talks within the parameters of its IMF programme.


(Reporting by Chris Mfula in Lusaka and Karin Strohecker in London; Writing by Bhargav Acharya; Editing by Alexander Winning and Ros Russell)