The International Monetary Fund (IMF) on Thursday said talks with Zambia over a possible bailout would continue over the next few weeks to address remaining fiscal challenges. The debt-ridden southern African country became the continent's first coronavirus-era sovereign default after skipping a $42.5-million (35.5-million-euro) interest payment on a eurobond in November last year. Zambian authorities requested funding from the IMF in December to finance reforms and tackle a ballooning external debt of almost $12 billion, around $3 billion of which is owed to China. Virtual talks between the two parties started on February 11 and ended on Wednesday without a final decision. "Significant progress has been made and discussions are expected to continue in the next few weeks," the IMF said in a statement on Thursday. "Key challenges remain," it added, citing fiscal reforms to be implemented and efforts to make more efficient use of public resources among others. The head of the IMF staff team, David Robinson, said the parties had reached a "broad agreement" on the causes of Zambia's "underlying macroeconomic imbalances". "Resolving the macroeconomic challenges will require navigating the need to continue to support the population... through the pandemic in a constrained fiscal environment," he noted. Zambia has applied for loan restructuring under a new G20 debt suspension initiative. Analysts believe that application will be facilitated if Zambia is under an IMF programme. The copper-rich country missed a second $56.1-million eurobond coupon payment in January, shortly before reaching out to the G20 framework. The IMF called for greater transparency on debt and expenditure, and a halt on the incurrence of domestic arrears. It pointed to a recent sharp increase in copper prices as an opportunity to "help smooth the adjustment". Zambia's government said the discussions had been "positive and constructive". "Government is committed to secure a programme with the IMF," Finance Minister Bwalya Ng'andu said in a statement. "We... will pursue our discussions on detailed police measures to return our economy and public finances to a sustainable trajectory." The government is grappling to recover the economic setbacks of coronavirus and garner public support ahead of general elections in August. str-sch/spm