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Zambia still has nearly USD 7 billion of debt on its books owed to bondholders and commercial banks, despite a deal with bilateral lenders entered last year for over USD 6 billion. It may be recalled that a deal with bondholders to restructure about USD 3 billion of debt last October was rejected by the official creditors.
Zambia still has nearly USD 7 billion of debt on its books owed to bondholders and commercial banks, despite a deal with bilateral lenders entered last year for over USD 6 billion. It may be recalled that a deal with bondholders to restructure about USD 3 billion of debt last October was rejected by the official creditors.
Creditors led by a consortium of France, China, and South Africa, argued that the terms Lusaka agreed with bondholders did not match the concessions the southern African country won from the official lenders. Analysts say the same plight may visit Ethiopia and Ghana, which are struggling with debt restructuring.
Long delays in Zambia’s debt restructuring have curtailed economic growth, and added to living costs for its people. It may be recalled that Zambia defaulted three years ago and is trying to rework its debt under the G20 Common Framework, a programme designed to ensure swift and smooth debt overhauls for low-income nations.
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Zambia is the first African country to default in the COVID-19 era. Its debt restructuring had started with drawn-out negotiations with bilateral creditors including China. Uncertainty or negative news on the restructuring progress has hit domestic bond markets, which may affect the government’s ability to fully finance the development works.
