Zambia’s has cancelled yet-to-be disbursed loans from the China Exim Bank and Industrial Commercial Bank of China worth $1.6 billion, seeking to help manage its debt overhang.
The cancellation of the undisbursed loans will see the country halting the construction of several roads, highways and information and technology projects funded by Chinese lenders.
In December last year, the International Monetary Fund gave the government a $1.4 billion support package, but said it will not disburse the money until the country’s creditors agreed to a debt restructuring exercise.
About 18 different Chinese creditors hold $6.6 billion in Zambian debt. Negotiations to restructure the country’s $17 billion external debt have dragged on and China has been largely accused of lack of commitment to resolving the crisis.