China invites Zambia’s private creditors for debt restructuring talks

The invitation follows an agreement among official creditors that the IMF said had ‘cleared the way’ for a US$1.4 billion relief programme

In 2020 Zambia became the first African country to default in the wake of the Covid-19 pandemic with external debts of more than US$17 billion

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Chinese Ambassador to Zambia Du Xiaohui pictured with President Hakainde Hichilema earlier this year. Photo: Xinhua

Published: 9:07pm, 4 Aug 2022

China has invited Zambia’s private creditors to discuss the nation’s debt later this month after official creditors agreed to a restructuring of its debt, according to Beijing’s ambassador to Lusaka.

Zambia’s creditors pledged to negotiate a restructuring of the country’s debts in a move welcomed by International Monetary Fund managing director Kristalina Georgieva as “clearing the way” for a US$1.4 billion relief programme.

The creditor committee, co-chaired by China and France, also called on private creditors to “commit without delay” to negotiating debt relief on terms at least as favourable.

“If the official creditors from China agree with the restructuring process, then the private sector from China will follow with comparable terms to deal with the debt issue for Zambia,” Chinese Ambassador to Zambia Du Xiaohui told a public discussion on Thursday.

“There is an invitation from co-chair China to other private creditors to have a friendly conversation on the Zambian debt issue this month.”

In 2020, Zambia became the first African country in the pandemic era to default. The restructuring of its external debt, which amounted to more than US$17 billion at the end of 2021, is seen by many analysts as a test case.