Zambia seeks debt reduction as part of restructuring package, President Hichilema says
By Clara Denina and Helen Reid
CAPE TOWN (Reuters) – Zambia’s President Hakainde Hichilema is happy China will co-chair a creditor committee with France throughout debt negotiations, he informed Reuters on Monday, including {that a} partial write-off of the nation’s $32 billion debt was on the desk.
Hichilema stated Zambia goals to keep away from one other debt default after it turned in 2020 the primary nation within the pandemic period to default on its debt.
“The general method is to rein in on the debt, which begins with ceasing to borrow recklessly going ahead, particularly not borrow at excessive price,” Hichilema stated throughout an interview with Reuters on the sidelines of the Mining Indaba convention in Cape City.
“Now that we’ve got this frequent framework … we’re in search of a discount within the debt as a part of the bundle. All the things is on the desk,” he stated.
Zambia, Africa’s second-biggest copper producer, is struggling to jumpstart its economic system because it grapples with a debt load reaching 120% of GDP.
Since Hichilema’s election final August, Zambia has carried out business-friendly reforms and investor sentiment has improved, with the kwacha foreign money rising in worth towards the greenback.
Zambia’s debt totalled $31.74 billion on the finish of 2021, based on official authorities knowledge – of which $17.27 billion was exterior debt. China held $5.78 billion of the exterior debt.
The primary assembly of the creditor committee is anticipated to happen subsequent week, Finance Minister Situmbeko Musokotwane informed Reuters in the identical interview. He reiterated that debt talks ought to finish in June, a timeline analysts contemplate bold.
Musokotwane had stated beforehand that debt negotiations have been “stalled” at Worldwide Financial Fund conferences final month, after Zambia secured a staff-level settlement on a $1.4 billion three-year credit score facility with the fund in December.
Zambia goals to extend copper manufacturing greater than three-fold, to three million tonnes of copper a yr throughout the subsequent decade. The nation produced 800,696 tonnes of copper in 2021.
It additionally goals to extend manufacturing of wheat and maize with a purpose to export, Hichilema stated, including that the nation has held talks with the European Union amongst others about offering wheat to the bloc.
Requested whether or not Zambia would welcome Russian firms investing within the mining sector, Hichilema declined to reply, however stated “we’re towards the struggle in Ukraine”. Zambia voted in March in favour of a United Nations decision condemning Russia’s invasion of Ukraine.
(Reporting by Clara Denina and Helen Reid in Cape City; Further Reporting by Rachel Savage; Enhancing by Susan Fenton)
