The true size of Zambia’s debt is “debatable” because the country has contracted more loans than official external debt numbers show, Bank of America Merrill Lynch analysts said.
While the nation signed up for $5.3 billion in debt from 2015 to 2016 and the lender estimates it contracted another $4.4 billion last year, official external debt only grew $1 billion over the period, analysts Rukayat Yusuf and Andrew Macfarlane said in an emailed note on Thursday.
“Although the true size of Zambia’s debt stock is debatable, there is no doubt that debt service costs have accelerated. We expect debt service costs will continue to rise.”
Zambia faces a heavy repayment schedule with lump sums due in 2022, 2024 and 2027, Yusuf and Macfarlane said.
Even so “we do not expect any near-term defaults given the restructuring of Chinese loans and official concessions,” they said.