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Lusaka’s Economic Recovery Plan

A week after taking office, Zambia’s new president Hakainde Hichilema has reshuffled the country’s security forces and kicked-off an economic reform drive. Zambia’s economy has borrowed heavily to bankroll questionable infrastructure projects since Lungu took power in 2015. A new independent debt office would also be created to manage the country’s vast debt that could exceed $12.7 billion, President Hichilema told Bloomberg news agency. The president also revealed that talks are ongoing with China to restructure their foreign debt, a quarter of which is held by Chinese entities. Striking a debt deferral deal with China, their biggest creditor, will be key to keeping the southern African country’s economy afloat, experts say. The murky details of Zambia’s Chinese debt profile has made it harder to qualify for IMF lending, leading to calls that Hichilema should pass legislation that will require all government loan contracts to be made public. The IMF is also expected to push for key economic reforms shortly after the election before signing off on a loan agreement. Hichilema had promised to ease the regulatory environment and bring back foreign investment to the mines in the run up to the election, though analysts say it is too early to tell whether his tenure will be a continuation of Lungu’s legacy of aggressive resource nationalism.