Zambia Signs Debt Revamp Deal With France Four Years in Making
Zambia and France signed a bilateral debt restructuring agreement, a key step in a protracted process that started when the southern African nation defaulted four years ago.
The deal is part of Zambia’s efforts to revamp about $13 billion in external debt after it became the first African nation to default during the Covid-19 pandemic in 2020.
“Three years ago, Zambia was a basket case,” Zambian Finance Minister Situmbeko Musokotwane said at the signing ceremony on Sunday in Lusaka, the capital. “What we are signing here this evening is really a landmark.”
The deal with France is the first that Zambia has signed with official bilateral creditors that range from China to Saudi Arabia and India. It’s also the first of its kind under the Group of 20’s so-called Common Framework guidelines for debt restructuring, a process that’s come under criticism for being too slow as it seeks to bring together diverse creditor groups.
Under the deal, Zambia pushes the maturity of its debt back by an average 12 years to beyond 2040, Musokotwane said. Interest rates are 1% for the next 14 years and won’t exceed 2.5% after that under the baseline restructuring scenario, he said.
