Proposals to restructure Zambia’s debts are yet to be discussed with bilateral creditors under the multilateral Common Framework process, Zambia’s finance ministry said on Thursday.
“The discussions we have had so far within the Common Framework were focused on clarifying numbers and discussing context. Debt restructuring proposals are yet to be discussed,” the ministry said in a written statement to Reuters.
Zambia became the first African sovereign default in 2020 and has struggled to finish a much-delayed restructuring of debts that reached 133% of GDP at the end of 2021, according to the International Monetary Fund (IMF).
China is Zambia’s largest bilateral creditor and Chinese lenders accounted for about a third of debt that stood at $17.27 billion at the end of 2021, according to Zambian government data.
China was “seeking clarifications” on IMF assumptions meant to underpin the debt restructuring, Zambia’s finance minister Situmbeko Musokotwane told the Reuters NEXT conference last month.
Although China had been blamed earlier this year for holding up the start of debt talks, it has consistently expressed its support for resolving Zambia’s debt issues and for the Common Framework negotiations.
Zambia’s finance ministry on Thursday reiterated that the Export-Import Bank of China is representing “the interests of Bilateral Chinese debt” on the Common Framework official creditor committee.
“With regard to commercial facilities, the Zambian Government has engaged the banks and Sinosure bilaterally in the past on the insured loan facilities,” the ministry said, in response to questions about whether it had had contact with its Chinese commercial creditors.
“Currently, it is our understanding that loans insured by Sinosure are part of the debt restructuring discussions within the Common Framework.”
A nearly $1 billion joint hydropower loan from EximBank and the Industrial & Commercial Bank of China (601398.SS), a commercial, state-owned Chinese lender, is “part of the debt restructuring exercise within the Common Framework and is being discussed by the Official Creditor Committee”, the statement said.
Jiangxi Bank (1916.HK), China Minsheng Bank (600016.SS) and Bank of China (601988.SS) are among other commercial Chinese lenders that have lent to Zambia.
