Zambia aims to resolve debt revamp standoff within three months
Zambia plans to resolve a standoff among its creditors within the next three months that’s stalled efforts to restructure its debt, a senior Finance Ministry official said.
There’s a difference of opinion over how different categories of loans should be treated comparably and the issue “should be able to be concluded not later than the first quarter of 2024,” Treasury Secretary Felix Nkulukusa told reporters in Lusaka, the capital, on Thursday. “We’re hoping that everyone will come on board.”
In November, China rejected a proposed deal between Zambia and bondholders, partly because of a misunderstanding over the comparability of treatment of creditors, people familiar with the matter said last month.
The southern African nation became the continent’s first pandemic-era sovereign defaulter more than three years ago, and has since struggled to agree on a new repayment plan that’s agreeable to all lenders.
Zambia has sought to restructure its liabilities utilizing the so-called Common Framework, which the Group of 20 drew up in late 2020 to help poorer countries overhaul loans with all creditors.
On an international level, consensus has yet to be reached on how different categories of creditors should be treated comparably, with the International Monetary Fund-driven Global Sovereign Debt Roundtable yet to agree on the matter.
“This is one of the challenges of being the front-runners” in using the Common Framework, Nkulukusa said.
