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Zambia’s creditors have agreed to reschedule US$6.3 billion, including US$1.3 billion in arrears, while private sector officials are expected to do the same on the US$6.8 billion owed to them. Zambian President Hakainde Hichilema was in the French capital for an international summit on finance this week.
The southern African country was the first African country to default on its debt in 2020, during the COVID-19 pandemic. The agreement comes after years of discussions between Zambia and its creditors to restructure its external debt which amounts to US$18.6 billion. The United States had previously accused China, Zambia’s biggest creditor, of dragging its feet in talks, something Beijing denies.
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US$4.1 billion of the US$6.3 billion owed to government bodies was owed specifically to the Export-Import Bank of China, according to a French official. Zambia’s debt will be rescheduled over more than 20 years with a three-year grace period during which only payments on interest are due. The restructuring will also enable Zambia to receive the next US$188 million tranche of money from the International Monetary Fund, a US$1.3 billion package approved in August 2022.
