LUSAKA, Sept 1 (Reuters) - The outlook for Zambia is more positive but the government still has to do more, International Monetary Fund representative Preya Sharma said on Thursday, after the Fund approved a $1.3 billion program for the southern African country.

The IMF's Debt Sustainability Analysis, which will form the basis of debt restructuring negotiations with Zambia's creditors, will be published in the next few days, Sharma said at a joint Zambian government and IMF news conference in Zambia's capital Lusaka.

The IMF Executive Board approval, a crucial step in the southern African country's quest to restructure its debts and rebuild an economy ravaged by mismanagement and COVID-19, would unlock an immediate disbursement of about $185 million, the Fund said on Wednesday.

Half of the $1.3 billion loan will be used for budget support and half for the country's reserves, central bank governor Denny Kalyalya said, with price stability and building international reserves a priority.

Zambia became the first African country to default in the pandemic era in 2020, struggling with debt that reached 120% of its gross domestic product.

Even after restructuring its debt, which was $17 billion at the end of 2021, according to government data, the level of debt servicing will still be "substantial", Zambia's finance minister Situmbeko Musokotwane said.

(Reporting by Chris Mfula; Additional reporting by David Lawder Writing by Rachel Savage Editing by James Macharia Chege and Tomasz Janowski)