Zambia’s minister of finance urged its official creditors to make progress on restructuring its debt at their next meeting, as the southern African country struggles to complete its long-delayed debt rework process after defaulting in 2020.
Zambia’s hopes of restructuring about $12.8 billion of external debt have been hampered by the concerns of its main creditors, including its largest official bilateral creditor China and international bondholders, about the scale of relief required.
“We now appeal to our Official Creditor Committee in their next meeting to make substantial progress in their deliberations… so that we may swiftly resolve our debt overhang and access our next tranche of IMF financing,” Finance Minister Situmbeko Musokotwane said in a statement released by the ministry.
“Delays to debt restructuring are having a significant impact on the economy and the livelihoods of our people,” he added.
The International Monetary Fund said in early April that the next $188 million payout from a $1.3 billion support loan to Zambia is contingent on the government reaching an agreement with its creditors.
Zambian President Hakainde Hichilema said earlier this month that France’s President Emmanuel Macron wanted the debt rework process to be finished before France hosts the June 22-23 Summit For a New Global Financial Pact.
France is co-chairing Zambia’s Official Creditor Committee with China.
Zambia’s kwacha currency has weakened 13% against the U.S. dollar to 19.46 to 1 dollar in the past six weeks, reversing a gain of 20% in the three weeks before that as investors hoped the debt restructuring was close to being completed .
“The uncertainty created by the protracted restructuring process has put pressure on our currency and made it difficult to attract much-needed foreign investment,” Musokotwane said in the statement, which did not specify when the official creditors would next meet.
