The International Monetary Fund (IMF) is believed to have withdrawn its demand that the beleaguered Zambia Telecommunications Company (Zamtel) be sold as a condition to the provision of a US$1.3bn loan to the Southern African country.

Zambia applied for the loan to support its economic recovery programme but the IMF stipulated the condition that Zamtel be sold, advising that recapitalising the company was tantamount to wastage.

This condition has now been rescinded but the organisation insists that Zambia remove agriculture and energy subsidies, among others. The country has already removed subsidy on fuel.

A statement by IMF team leader Tsidi Tsikata features a list of conditions but the issue of Zamtel sale is not included.

The IMF team was in the country last week for further negotiations with the Zambian government on the loan conditions.

Tsikata said there was a broad agreement on key objectives, targets and policies most of which are drawn from government's economic programme.

"However, further engagement is needed on details of measures and reforms to achieve fiscal consolidation targets while protecting social spending and clearing the large stock of arrears without accumulating new one. We have agreed to continue discussing at the forthcoming Spring Meeting of the IMF and World Bank in Washington DC next month," Tsikata said.

Zamtel is the country's smallest operator with less than 2 million subscribers. It has not made a profit since 2012 when the Zambian government repossessed it from LapGreen Networks of Libya.

The telco was recently transferred to the Industrial Development Corporation (IDC) after the government failed to secure US$300 million investment required to make it viable.

CEO Dr. Mupanga Mwanakatwe resigned in February and its board was dissolved.