Zambia criticises debt restructuring delays – FT

ZAMBIA’S finance minister criticised the prolonged nature of the country’s debt restructuring talks, the Financial Times reported, after a Chinese call for the World Bank and other multilateral lenders to offer debt relief sparked concern about further delays.

In an interview with the newspaper, Situmbeko Musokotwane said that “time is of the essence” to finish a restructuring of about $13 billion of external debt this year.

Multilateral lenders, who don’t usually take haircuts, should participate in debt relief for Zambia, a Chinese foreign ministry official said last month. This insistence was one of the main sticking points in talks, a U.S. Treasury official told Reuters.

“Discussions at higher levels like those just make our situation worse, because what we are looking for is urgent solutions, not discussions that may drag out the matter,” the FT quoted Musokotwane as saying.

The FT report was corrected on Monday to say that the minister had criticised debt restructuring delays, not rejected China’s call for multilateral banks to offer debt relief.

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“China has always attached great importance to the Zambian debt issue,” Wang Wenbin, a Chinese foreign ministry spokesman, told a regular press briefing in Beijing on Monday. “Under the common framework of the Group of 20, it has played a constructive role in dealing with Zambia’s debt,” he added.

The People’s Bank of China and the Ministry of Finance both did not respond to a Reuters request for comment.

Zambia became the first African country to default in 2020 following the onset of COVID-19, but the restructuring of its external debts of almost $15 billion with creditors including China and Eurobond holders has been greatly delayed.

Government data showed Zambia owed Chinese creditors nearly $6 billion of the total $17 billion external debt at the end of 2021.

U.S. Treasury Secretary Janet Yellen and other Group of Seven countries have grown increasingly frustrated about what they see as foot-dragging by China in moving forward on debt rescheduling for countries seeking help.

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“Zambia is in no position to reject any proposals between China and the World Bank,” Zambia’s finance ministry said in a statement published later on Monday, adding it hoped for a “successful debt restructuring early this year”.

“Zambia remains appreciative of the significant effort being asked of all Zambia’s creditors – and particularly our Chinese creditors,” the statement added.

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