The three-year bailout “will help reestablish sustainability through fiscal adjustment and debt restructuring” through a “homegrown economic reform plan” formulated by President Hakainde Hichilema's government, the Washington-based multilateral lender said.

The deal is a landmark for how the IMF will respond to a wave of debt distress in countries that have borrowed heavily from China. The bailout was unlocked after Beijing agreed in principle in July to restructure loans under a G20 framework to co-ordinate debt relief.

This week, the IMF also announced an agreement with Sri Lanka on a draft $2.9bn bailout that will head to the fund’s board for sign-off, and approved a $1.1bn disbursement to Pakistan. Both South Asian countries took significant loans from Beijing in recent years before becoming mired in debt crises.

The deal is a landmark for how the IMF will respond to a wave of debt distress in countries that have borrowed heavily from China. The bailout was unlocked after Beijing agreed in principle in July to restructure loans under a G20 framework to co-ordinate debt relief.

Zambia's finance ministry has already cut back sharply on infrastructure projects in the pipeline, cancelling $2bn in yet-to-be disbursed loans — largely from Chinese banks.