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Zambian officials held debt talks with Chinese banks last week

ZAMBIAN officials went to China last week to discuss debt restructuring with representatives of the Export-Import Bank (EXIM) of China and some Chinese commercial banks, the secretary to Zambia’s Treasury said.

Felix Nkulukusa said Zambia was on course to reach a new agreement after its official creditors, including China EXIM, rejected a preliminary restructuring deal for its Eurobonds in November.

Zambia defaulted on its sovereign debt in 2020 and its debt restructuring under the G20’s Common Framework process has been beset by delays. Under the framework, debtor countries are meant to agree on comparable restructuring deals with official and commercial creditors.

When Zambia’s official creditors rejected the preliminary deal it had reached with international bondholders in November, they complained that the deal was not comparable to the debt relief they had offered and that more was needed.

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“We were in China last week. We went to meet with the private commercial creditors,” Nkulukusa told Reuters.

Earlier on Friday, at a public event on the economic outlook, he said: “We are on course. We are sharing our restructuring proposals and we hope that sooner than later we are going to reach an agreement.”

At the end of 2022, Zambia owed China EXIM $4.1 billion and international bondholders $3.5 billion, according to the International Monetary Fund. About $1.8 billion was owed to other Chinese lenders.

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By CHRIS MFULA

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