Zambia dismisses China’s request that the World Bank join its debt-restructuring efforts.
The Financial Times reported on Monday that Zambia’s finance minister rejected a request from China for the World Bank and other multilateral lenders to join a restructuring of the country’s debt and warned that delays were slowing the economy.
Situmbeko Musokotwane stated in an interview with the newspaper that “time is of the essence” to complete a restructuring of approximately $13 billion in external debt this year and hinted that China’s demand was a diversion from discussions about decreasing the debts.
The newspaper cited Musokotwane as adding, “Debates at higher levels like those merely make our position worse, because what we are looking for are urgent solutions, not discussions that may drag out the subject.”
A Reuters request for comment did not receive a prompt response from either the Ministry of Finance or the People’s Bank of China.
Zambia became the first African nation to default under COVID-19 in 2020, but the restructuring of its over $15 billion in external debt with creditors like China and Eurobond holders has been significantly postponed.
According to government figures, Zambia will have a $17 billion external debt by the end of 2021, with roughly $6 billion of that due to Chinese creditors.
Treasury Secretary of the United States Janet Yellen and other members of the Group of Seven have grown increasingly impatient with what they perceive to be China’s slow progress on debt rescheduling for nations seeking assistance. For its part, China contends that multilateral organisations should be forced to accept debt reductions as well.
