Zambia’s official creditors led by China have agreed to provide debt relief to the country, paving the way for a $1.3 billion IMF bailout to revive Zambia’s finances.
A committee of creditors co-chaired by France and China said they were “committed to negotiate with Zambia terms of a restructuring” under a G20 framework in order to co-ordinate debt relief.
Nevertheless, the country still has to negotiate exact terms of the relief and reach a similar deal with private creditors.
Zambia became the first African country to default during the coronavirus pandemic in 2020 when it halted payments on $17 billion of external debt, including $3 billion in US dollar-denominated eurobonds, after years of rising debt distress.
On the other hand, China has emerged as the country’s biggest creditor in the last decade, offering an estimated $6 billion of loans as the country embarked on ambitious infrastructure projects such as roads, dams, and airports.