Club sandwich

27 Apr 2022 By Ed Cropley Follow @edwardcropley

Beijing has agreed to work with the Paris Club of official creditors to clear up Zambia’s $17.3 bln debt mess. That’s a major shift from the bilateral approach it usually adopts. An even bigger sign of progress would be accepting a haircut on the $5.8 bln that China is owed.

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Zambian President Hakainde Hichilema on April 25 thanked China for joining the African nation’s committee of official creditors, a big step towards restructuring its debt.

Zambia defaulted in 2020, the first country to do so in the pandemic era, after its debt burden reached more than 120% of national output.

At the end of 2021, Zambia’s external debt stood at $17.3 billion, according to government figures. Of that, China and Chinese entities held $5.78 billion. A further $3 billion was owed to international bondholders and $2.1 billion to multilateral lending agencies such as the International Monetary Fund.

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