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Lusaka’s Plans to Deal with a Mountain of Debt

Zambia’s new finance minister, Situmbeko Musokotwane, said it was critical to agree to a lending programme with the IMF because it would give creditors confidence and the government cheaper and longer financing. Musokotwane faces the daunting task of trying to pull the southern African country out of a protracted debt crisis and has pledged to prioritise talks with the IMF. He told public broadcaster ZNBC he was confident Zambia would get an IMF programme before the end of the year and thereafter restructure its debt. The government has a $750 million Eurobond due next year but says it cannot repay it. Zambia, Africa’s second-biggest copper producer, became the continent’s first coronavirus-era sovereign default in November after failing to keep up with payments on its more than $12 billion of international debt. Of Zambia’s external debt, some $3 billion is in Eurobonds, $3.5 billion is bilateral debt, $2.1 billion is owed to multilateral lending agencies and another $2.9 billion is commercial bank debt. A quarter of the total is held by either China or Chinese entities via deals shrouded in secrecy clauses, making negotiations for IMF relief particularly tough.