The president of Zambia, Hakainde Hichilema, announced in a tweet that the nation has arrived at an agreement on a debt treatment with official creditors, ” describing it as a “significant milestone in our journey towards economic recovery (and) growth.”
The debt treatment agreement covers bilateral loans owed by Zambia to other nations, with China being the largest creditor at $4.1 billion.
While a portion of Zambia’s external debt, owned by institutions such as the World Bank and IMF, cannot be restructured, the total debt owed by the country amounts to $32.8 billion, with $18.6 billion owed to foreign creditors.
IMF Chief, Kristalina Georgieva, said this unique and innovative agreement specifies both a baseline and a contingent treatment that would be automatically triggered if the assessment of Zambia’s economic performance and policies improves.
An anonymous French official spoke on the margins of a meeting to restructure the international financial system in order to better combat poverty and climate change confirmed the deal on Zambia’s $6.3 billion debt.
With a population of close to 20 million, Zambia is the largest copper producer in Africa. In 2020, however, Zambia defaulted on its $18.6 billion foreign debt after discussions stalled due to disagreements between Chinese and Western creditors.