LUSAKA (Reuters) – Zambian President Hakainde Hichilema thanked China on Monday for joining international efforts to help his country to restructure its debt after China committed to joining Zambia’s creditor committee at International Monetary Fund meetings last week.
Meanwhile IMF Managing Director Kristalina Georgieva welcomed the country’s economic reform progress, saying she had an “excellent meeting” with Finance Minister Situmbeko Musokotwane and central bank Governor Denny Kalyalya on Monday.
“We share the hope for rapid progress on #Zambia’s debt restructuring so the IMF Board can soon consider the authorities’ program,” Georgieva said on Twitter https://twitter.com/KGeorgieva/status/1518649347189223425?ref_src=twsrc%5Egoogle%7Ctwcamp%5Eserp%7Ctwgr%5Etweet.
In 2020 Zambia became the first country to have defaulted in the pandemic-era when its debt burden reached more than 120% of national output. It reached a staff-level agreement with the International Monetary Fund (IMF) in December 2021 on a $1.4 billion three-year extended credit facility.
“Thank you to China for joining the Common Framework, for agreeing to join the Common Framework to resolve the debt crisis,” Hichilema told reporters in Lusaka.
He added that authorities were working with fertiliser-producing countries to try to alleviate the pressures of rising fuel and fertiliser prices and also wanted to develop exports of wheat to take advantage of higher prices.
Georgieva said last Thursday that China has committed to joining Zambia’s creditor committee. Sources with knowledge of the meeting said People’s Bank of China Governor Yi Gang said that China intended to co-chair the committee.
China and Chinese entities held $5.78 billion of Zambia’s debt at the end of 2021, according to the most recent Zambian government data. Zambia’s external debt also includes $3 billion in international bonds and $2.1 billion to multilateral lending agencies such as the IMF.
However, Zambian officials have also expressed frustration at the process.
Musokotwane said at events on the sidelines of the IMF meetings last week the debt restructuring process had “stalled” and Zambia had “come here to complain”.
(Reporting by Chiwoyu Sinyangwe in Lusaka and Rachel Savage in London;Writing by Tim Cocks and Angus MacSwan; Editing by Marguerita Choy)