Zambia endured Africa's first COVID-era sovereign default in November 2020 after years of chronic government over-borrowing drove its debt burden above 120% of annual economic output.

The International Monetary Fund and Zambia this month reached a staff level agreement on a $1.4 billion, three-year extended credit facility, bringing the heavily indebted copper producer one step closer to a comprehensive debt overhaul. read more

"We expect that if all goes well, we should have agreement with creditors in the middle of next year," Musokotwane said in parliament ahead of the approval of the 2022 national budget.

Musokotwane said Zambia's economy was in debt distress and the relative stability that it had experienced in the past few months was because most creditors had allowed it to default.

The government of President Hakainde Hichilema, who was elected in August, started talks with the IMF in early November.

Zambia's external debt includes around $3 billion in international bonds, $2.1 billion to multilateral lending agencies such as the IMF and another $3 billion to China and Chinese entities.

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Reporting by Chris Mfula; Editing by Emma Rumney, Alison Williams and Andrew Heavens