Zambia on Thursday secured a deal to restructure more than $6 billion in debts owed to other governments.
Zambia in 2020 became the first African country to default on its sovereign debt during the COVID-19 pandemic and has struggled since in protracted negotiations to agree a deal on the $12.8 billion of external debt it was trying to restructure.
The agreement calls for Zambia’s debt to be rescheduled over more than 20 years with a three-year grace period during which only payments on interest are due.
The restructuring agreement with official creditors paves the way for Zambia to receive another $188 million tranche of money from the International Monetary Fund, part of a $1.3 billion package approved in August 2022.
The scale of the debt relief Zambia requires has been a concern for some of the country’s main creditors.
Zambian President Hakainde Hichilema was one of about 40 leaders attending a summit in France on Thursday and Friday aimed at easing the debt burden on some of the world’s most vulnerable countries while freeing up billions of dollars in new funds for climate finance.
The president was optimistic about securing a debt agreement in Paris, which has finally been realised.
Hichilema said this debt treatment deal is “a significant milestone in our journey towards economic recovery & growth.”
The Zambian leader also thank their official creditors for their continued engagement & support.