Zambia is in talks with the IMF (International Monetary Fund) for financial support, even as its economy continues to plummet due to years of crisis, which has been made worse by the global COVID-19 pandemic.
On 3rd November 2020, the country became the first African country to default on its international debt since the pandemic. The copper-producing country failed to make the $42.5 million in interest payments expected by investors on its three Eurobonds in mid-October. It also was unable to honor payments as at the end of the grace period.
The Zambian government had earlier requested its Eurobond holders to grant it a deferral of interest payments up to April 2021, as it struggled with the dual burdens of a dwindling economy and fighting the pandemic.
However, The Zambia External Bondholder Committee, which holds more than 40% across all of the country’s bonds and a blocking stake in each issue, had already indicated it would reject the government’s plan, citing a lack of transparency and communication.
Zambia owes close to $3.5 billion in bilateral debt, $2.1 billion to multilaterals, and $2.9 billion to other commercial lenders. It owes close to $3 billion to China and Chinese entities.
In 2017, the country began negotiations to obtain a $1.3 billion financing agreement from the IMF. But the Fund rejected the request several times.
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