Browsing: Zambia’s Economy

Zambia debt relief pledge clears way for $1.4 billion program, says IMF www.theexchange.africa

The creditor committee for Zambia stated that the conditions of the reorganisation would be finalised in a memorandum of understanding, but they did not provide any other specifics.

Additionally, it requested that private creditors “commit without delay” to the process of negotiating debt relief on conditions at least as favourable as those proposed by the government.

Kevin Daly, who is in charge of a group of Zambian Eurobond holders, praised the bilateral creditors’ statement but reiterated the need for access to the Debt Sustainability Analysis (DSA) of the IMF, which serves as the negotiation’s starting point.

The World Bank’s president, David Malpass, reiterated such sentiments, saying, “I implore official bilateral and private sector creditors to participate on equal terms, granting Zambia a considerable net-present-value debt reduction.”

In the year 2020, Zambia became the first nation in the Covid-19 era to default on its obligations. At the end of the year 2021, its total external debt was US$17.27 billion, of which China held US$5.78 billion. Currently, it is engaged in discussions with its creditors and the International Monetary Fund (IMF) to find a way to climb out of its current financial predicament and reduce its reliance on debt.

There are several other countries besides Zambia that owe a significant amount of money to China. It is believed that African countries’ debts with the country make up a third of the total obligations owed to private lenders who are not Chinese. Over a third of the debt repayments for the year, 2021 were transferred to Chinese lenders by Angola, the Republic of Congo, Cameroon, Djibouti, Ethiopia, and Zambia, respectively.

Deborah Brautigam, a researcher with the China Africa Research Initiative (CARI), states in a report that ” It cannot be overstated how exceptional Zambia’s debt burden is in comparison to that of other countries that have taken Chinese loans.