The lack of transparency in a deal reached between Zambia’s debt-laden government and the China Development Bank (CDB) is making Zambia’s debt crisis worse, says the head of a China-Africa think-tank. Zambia reached a deal with the CDB, the biggest of three state-owned policy banks, to defer debt repayments on a loan that were due this month, Zambia’s government announced on Thursday. Under the deal interest payments were postponed for six months until the 25th April 2021, the secretary to the Treasury Fredson Yamba said in the statement. The deal shows rare flexibility on behalf of a Chinese lender, but the secretive nature of negotiations – with the size of the loan and the amount of the debt repayments due remaining undisclosed – is adding to Zambia’s problems by blocking the country’s access to international capital says Eric Olander, co-founder and managing editor of the China Africa Project. Zambia owed CBD around $311m in June 2019, according to the latest Zambian finance ministry figures. The Zambian government missed a $42.5m coupon payment on one of its Eurobonds that was due on October 14 but has a 30-day grace period before it goes into default. The deal is also unlikely to pressure Zambia’s bondholders to take a haircut and accept similar terms on their returns, Olander says.
SOURCE: AFRICAN BUSINESS MAGAZINE
More Stories
Harare’s New Scheme to Curb an Economic Collapse
Africa’s Airspace Faces Steep Competition
Not Enough Females Operating in the African Venture Capital Space
The Digital Economy as an Important Driver of Long-term Growth in Africa
French Winemaker Accused of Using CAR Militia as Security
Freetown Gets New Money
Ghana Gives In and Approaches the IMF
Kenya’s Tech Startup Ecosystem is Looking to Attract even more Overseas Interest with New Hub
G7 Looks to Finance Africa’s Infrastructure Ambitions
South African Businesses are Struggling to Cope as Another Wave of Power Cuts have Hit the Country
MTN Hacked Just as it Launches Mobile Payments in Nigeria
Tanzania, like Many other African Countries, Wants to Stop Depending on Fertiliser from Russia