Finance Minister: Zambia Is working Diligently To Restructure Debt

Zambia's Finance Minister, Situmbeko Musokotwane, has stated that the country is working diligently with its creditors, including China, in hopes of reaching a debt restructuring agreement by the end of March or soon thereafter.

Zambia was the first African country to default on its sovereign debt during the COVID-19 pandemic in 2020, and the restructuring of its external debts to creditors such as China and Eurobond holders has been significantly delayed.

Musokotwane informed an online forum that "We have done everything on our side to get the debt restructured. Unfortunately, the process where so many interested groups are involved on the creditor side, there's been a delay."

Zambia's largest bilateral creditor, China, is being engaged in the debt restructuring through weekly bilateral engagements, he added.

Zambia's external debt was $14.87 billion at the end of June 2022, according to the minister's previous statements.

However, delays in the debt restructuring process are putting pressure on the local currency, as foreign investors are apprehensive about investing in Zambian bonds for fear of their investments being subject to restructuring.

U.S. Treasury Secretary Janet Yellen and other Group of Seven countries have become increasingly frustrated with what they perceive as China's foot-dragging in negotiations for countries seeking debt relief.

Despite the difficulties, Zambia remains committed to finding a solution and hopes to reach a restructuring agreement soon.

Photo: REUTERS/James Lawler Duggan