Zambia has turned down China’s invitation for the World Bank to join its debt restructuring efforts. In an interview, Zambia’s finance minister Situmbeko Musokotwane said that the country is aiming to repay a $13bn loan in 2023, three years after defaulting on it.
As the Covid-19 pandemic wreaked havoc on Africa, Zambia became the first country on the continent to default on its foreign debt, estimated at $17.3 billion. After businessman-turned-politician President Hakainde Hichilema’s election in 2021, the country has taken steps to restore ties with donors.
Last year, the International Monetary Fund approved a $1.3 billion loan to assist Zambia in regaining fiscal stability. Despite this, the debt-restructuring settlement has stalled, and Hichilema’s administration has been unable to access a $1.3bn bailout from the IMF. Zambia’s debt to China is estimated to be $6bn, split across major banks.
Zambia’s move is in line with its strategy of managing its debts autonomously, without involving multilateral creditors. In a 2020 statement, Musokotwane had said that his government was prioritising engagement with individual creditors to facilitate the implementation of its restructuring plan. Zambia is not the only country that has recently pushed back on Chinese debt-restructuring proposals; in December, Angola rejected China’s offer to swap its debt into equity in state-owned oil company Sonangol.
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