LUSAKA, May 9 (Reuters) – The International Monetary Fund said on Thursday it would continue discussions with Zambian authorities on policies that would unlock the next disbursal from a $1.3 billion, three year loan programme.

An IMF staff team was in Lusaka from April 24 to May 7 to discuss Zambia’s economic policies for its third review of the country’s 38-month Extended Credit-Facility programme, which was approved in September 2022.

The completion of the review would pave the way for the fourth disbursement under the programme, after the IMF’s board released $187 million in December, as the country moves closer to emerging from debt default while struggling with a punishing drought.

Vera Martin, the IMF’s mission chief for the southern African nation, said talks between the IMF staff and the authorities focused on analysing recent economic developments and the impact of the drought.

“Discussions will continue virtually in the coming weeks toward completion of the Third ECF review,” sheadded in a statement issued at the end of the mission that did not say why an agreement was not reached during the visit to Lusaka.

One of the largest copper producers on the African continent, Zambia defaulted in 2020 during the COVID-19 pandemic.

Its debt restructuring efforts have been beset by delays, although they took a step forward in March when the government and a group of bondholders reached a deal-in-principle to rework about $3 billion of international bonds.

(Reporting by Chris Mfula in Lusaka, additional reporting by Jahnavi Nidumolu and Disha Mishra, Writing by Bhargav Acharya and Rachel Savage Editing by Bate Felix and David Gregorio)