Zambia has just signed an agreement to restructure 6.3 billion dollars of debt owed to other governments, including China, its main official donor, after long years of negotiations with its creditors.
Zambian President Hakainde Hichilema said the agreement marked an important step for the country on the road to recovery.
The International Monetary Fund has approved a $1.3 billion package for Zambia in August 2022 and the restructuring agreement reached with official creditors will enable Zambia to receive a further tranche of $188 million.
As part of the agreement, Zambia’s debt will be rescheduled over more than 20 years, with a three-year grace period during which only interest payments are due.
Approximately $4.1 billion of the $6.3 billion in debt owed to government agencies was owed specifically to the Export-Import Bank of China, which analysts say underlines the importance of China’s support for the debt relief agreement.