Source: AFP
Zambian President Hakainde Hichilema on Friday accused private creditors of holding up a long-awaited debt restructuring deal for the first African nation to go bankrupt after the Covid pandemic.
Zambia, which was $18.6 billion in debt when it defaulted in 2020, reached an agreement in principle in October with foreign lenders.
Hichilema said about 98 percent of official creditors have now signed a memorandum of understanding to restructure Zambia’s debt, which is estimated at $32.8 billion at the end of 2022.
“This is a big milestone,” he told a news conference in the capital Lusaka.
But talks with private creditors have reached an impasse, he said.
“We are still negotiating,” Hichilema said.
The row is over a “comparability of treatment” rule under a debt restructuring framework for the poorest countries agreed by the G20 group in 2020, he said.
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This requires all creditors to suffer similar losses in any debt restructuring agreement.
“The official creditors want to review and say yes to the content of what we are negotiating with the private creditors,” added the president.
“In this case some official creditors felt that the private creditors were not yet on par with them,” Hichilema said.
He urged official and private creditors to meet to “crunch the numbers” and resolve the impasse.
After the October deal, some official creditors, including China, initially rejected it, protesting the more favorable terms granted to some private exporters.
This week, the International Monetary Fund (IMF) said immediate implementation of the October deal and a deal with private creditors were critical to restoring Zambia’s “debt sustainability”.
Revising Zambia’s economic growth outlook in 2023 to 4.3%, the IMF has approved a second review of the loan agreement so that nearly $200 million can be unlocked for Zambia.
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![](https://images.yen.com.gh/images/28500d33b72cb07a.jpg?impolicy=cropped-image&imwidth=256)
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The delayed negotiations are seen as a test case for the G20’s common framework at a time when there are growing concerns about debt in low-income countries.
The framework has been criticized as many African nations are either already in or on the brink of debt.
Ghana followed Zambia into bankruptcy and is also in talks with creditors and the IMF.
Source: AFP