Zambia has struck a deal to restructure $6.3 billion in debt owed to governments abroad including China, in a breakthrough for indebted nations around the world that have faced lengthy negotiations with their creditors.
China is the largest official creditor to Zambia, with $4.1 billion owed to the Export-Import Bank of China alone, underlining the importance of Beijing’s support for the deal.
Zambia in 2020 became the first African country to default on its sovereign debt during the COVID-19 pandemic and struggled since then in protracted discussions to agree a deal.
The agreement reached at a summit in Paris 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 debt earmarked for restructuring includes $1.3 billion in arrears, and private sector creditors are expected to do the same on the $6.8 billion owed to them, according to a French official who asked not to be identified.
President Hichelema shakes hands with Emmanuel Macron