Zambia is asking for more than $8bn of relief on its debts to Chinese lenders, private bondholders and other creditors, according to an IMF analysis, in a restructuring widely seen as a test of Beijing’s willingness to absorb losses on loans it has extended to developing countries.
After securing an IMF bailout last week, Zambia plans to reduce its debt payments by $8.4bn over the next three years, according to a fund analysis that was published on Tuesday. Further debt adjustment is likely later on, it added.
President Hakainde Hichilema’s government secured the $1.3bn IMF loan, two years after Zambia became the first African country to default in the pandemic following what the fund called “years of fiscal profligacy”. The country’s debts quadrupled between 2014 and 2019 amid a surge in infrastructure borrowing under Edgar Lungu, the former president, who lost elections last year to Hichilema.