By Leigh Thomas
PARIS (Reuters) – Zambia has reached a deal and restructuring owes others, a French official said in a long-awaited statement on Thursday. The government’s debt exceeds $6 billion. A breakthrough to ease strained public finances in southern African countries.
Zambia 2020 becomes first African country to default on sovereign debt during covid-19 arrogance Since the pandemic, it has been struggling to reach an agreement on the $800 million in foreign debt it is trying to restructure in protracted negotiations.
“We have agreed on an outline for the debt treatment and the negotiations are over,” the French official, speaking on condition of anonymity, told reporters. Zambia’s public sector creditors agreed to reschedule a $6.3 billion deal, the official said. , including $1.3 billion owed, and private sector creditors are expected to do the same for the $6.8 billion it owes.
“We’ve talked to representatives of the private sector and they know what’s going to happen and they’re going to have to restructure and make a similar effort,” the official added.
The agreement calls for Zambia’s debt to be rescheduled for a period exceeding 19 years, with a three-year grace period during which only interest payments will be made.
Restructuring agreement with official creditors paves way for Zambia to receive another 19 million dollar funding from the IMF, which is $1.3 billion Part of the funding package was approved in August 2020.
The size of Zambia’s requested debt relief has been a concern for some of the country’s major creditors.
Some Western officials have accused China – Zambia’s largest bilateral creditor – of French officials saying they are dragging their feet in restructuring talks, which Beijing denies.
Of the $6.3 billion in debt, $4.1 billion is owed specifically to China Export-Import Bank.
Zambian President Hakainde Hichilema was at the French summit on Thursday and Friday One of the approximately 19 leaders of the summit aimed at reducing the debt burdens of some countries around the world said Beijing did not want to see further delays in Zambia’s progress at the summit. Debt relief and freeing up billions of dollars in new money for climate finance. President Emmanuel Macron’s talks with Chinese authorities in Beijing in April also helped ease the situation.
Zambia seen as test case for bloc-backed debt restructuring framework) Rich countries intend to simplify relief for countries caught in developing country debt crisis sparked in part by coronavirus pandemic.
However, the process has been extremely slow for Zambia, a country where virtually all but a few other troubled governments are reluctant to seek help under the mechanism.