China’s government is in the process of consulting internally about Zambia’s international debt restructuring, Secretary to the Treasury Felix Nkulukusa says.
“I went to China myself with the minister of foreign affairs and China indicated they were coming on board and they are just making internal consultations,” Mr. Nkulukusa told Reuters, declining to give further details of the March trip.
Zambia was the first country to default in the pandemic era, in November 2020, as it buckled under debt of more than 120per cent of GDP.
The debt hit US$31.74 billion at the end of 2021, 17per cent higher than six months earlier, according to official Zambian data.
China and Chinese entities held US$5.78 billion.
“We are now waiting for the official creditor committee to be formed and then we will present the debt sustainability analysis,” Mr. Nkulukusa said.
Zambia and China’s foreign ministers held talks on March 19, Zambia’s embassy in Beijing said in a statement at the time, during which “the two sides applauded the excellent relations that exist between Zambia and the People’s Republic of China.”
Zambian finance minister Situmbeko Musokotwane told parliament on March 25 that its creditor committee would be announced “within the next few weeks”.
He said last week that the southern African nation should get a formal deal with the International Monetary Fund, which holds its Spring Meetings next week, by mid year.
Zambia reached a staff level agreement with the IMF on a US$1.4 billion, three-year credit facility in December 2021.
“We’ve got one international creditor that seems to taking a bit more time to make a decision,” Britain’s Africa minister Vicky Ford said on a visit to Zambia last week on the privately owned Hot FM Radio, without giving further details.
Zambia is also struggling to service some “old debt”, presidential spokesman Anthony Bwalya told Reuters, but declined to specify which.
“On one hand we need to service those debts and on the other we need to provide critical public services,” Bwalya said.
That’s why it is important that we quickly anchor down that IMF deal so that those monthly payments – principal and interest – can be brought down to something that is within affordable margins.”
At the end of 2021, the country was in interest arrears on a majority of its foreign currency debt, according to government data.
China has lent African countries hundreds of billions of dollars as part of President Xi Jinping’s Belt and Road Initiative (BRI) which envisaged Chinese institutions financing the bulk of the infrastructure in mainly developing nations. Yet the credit has dried up in recent years.
But did you even imagine for a moment that you can deal with Zambia’s foreign debt without the involvement of China? In fact China should’ve been the first creditor to be engaged, but it seems you anchored your hopes on an easy IMF deal. The Chinese aren’t that difficult, just engage them. Don’t listen to Western propaganda. Although part of that debt was stolen by the PF, Chinese money has left a trail. You have many 1st level hospitals, Levi Mwanawasa Teaching Hospital, Gabon Disaster Stadium, Levi Stadium, Lusaka Bulky Water Supply project, township roads, Mulungushi International Conference Centre, Kafue Gorge Hydro Power plant, Kapasa Makasa University etc. But give us your plan B should the IMF deal fail
Yes China will come on board – AFTER THE COUNTRY HAS BEEN SOLD OUT!
Ayatollah, your objectivity here has amazed me. So u accept that part of the Chinese debt was stolen by the PF. This is great, Zambia has a future.
#1 Ayatollah spot on.
Sounds familiar. Once upon a time someone said they had personally witnessed the signing of petroleum with Saudi Arabia that would result in 5 Kwacha per liter petrol at the pump. It never came to pass. I hope you are not playing on our short memories to dupe us into some hitherto unknown scheme being cooked up.
@Ayatollah Fye: You are even proud to say china is easy to deal with – Wrong! China is easy to deal with you,And not you deal with them – its a non starter, They are communist,they dont listen to nobody but themselves.
So all those HongKong smiles that you were seeing during PF,was because China was going to have chinese police officersin Zambia. And not other way around. Try yourself to be even a cleaner on huanghuang high way and see what you dont know about China. China smiles when it comes to you and vicerversa,does not smile when you go to them. So in the case of Zambia and its loans,this time was always going to come but it wouldnt have come if Lungu continued to be president becos he was going to continue with their Agenda:Giving them more land, employing more chinese as cops.OP,later on even Judges, MPs, PS, etc you were going to see a Chinese only Bank,Chinese only etc….Zambia was going to become a direct first hand classroom lesson of Chinese colonialism in Africa.
You were going to have the scenario that South Africa had – Apatheid. But this time around -Zambian Apatheid performed by the Chinese. Trust it was going to get there for as long as Lungu was president. Remember,they already had Zesco in their armpit,ZNBC,Zamtel, Zampost and recently they were encroaching on a field they completely ve no clue about -Mining. And no one talked of this – Chinese were begining to own mines in very large numbers,this was going to be the final nail to Dea Zambia cos Agriculture Chinese already grows Tomatoes,Onions,Potatoes and sells Chickens too. You guys are lucky, real suffering and human segregation was coming your way. Be grateful this GRZ is saving your asses by cancelling all chinese deals and re-negotiationg fresh deals on Zambian terms. cos the PF…
Yes , zambia was going to be taken over by China if lungu continued…………
Those saying China should have been the first country consulted are wrong……..
China does not own zambia, not anymore.
The new GRZ is putting zambias interests first……….above any country.
Loans from China are at their maximum. Anymore from China then surely you will give up your sovereignty……….
The president is playing it right by diluting Chinese influence with Western intervention……….
So I was right when I saw that photo of Minister of Foreign Affairs in China last month and said his visit was about debt extension…funny enough the govt hide all this information even who was in the entourage.
Spaka – Yes China owns Zambia please stop daydreaming…you owe them too much money building strategy infrastructure that is technically theirs…so they own you.
#11 Tarino Orange
April 13, 2022 At 11:48 am
“Spaka – Yes China owns Zambia please stop daydreaming…you owe them too much money building strategy infrastructure that is technically theirs…so they own you…”
China owned lungu and PF………..
That was their folly…….they invested so much in lungu and the corrupt PF , ………
What they did not bargain for was the incompetence of lungu and his regime……..
China also did not bargain for the fact democracy is live and well in zambia……..and their preferred PF lost elections due to their incompetence…….
In countries like zambia where China bankrolled a corrupt regime that lost elections, China now does not hold all the cards………
Worst for them, the new GRZ is more western leaning……
Spaka – This is why there was uproar when PF was borrowing because it was not Lazy Lungu borrowing but the country and this passed on to our grandchildren.
ITS OBVIOUS CHINA WILL COME ON BOARD 100%
BUT NO ONE IS ASKING OR THINKING WHAT THAT COST WOULD BE
#13 Tarino Orange
April 13, 2022 At 12:38 pm
“Spaka – This is why there was uproar when PF was borrowing because it was not Lazy Lungu borrowing but the country and this passed on to our grandchildren…”
Yes, a loan is a loan , and must be repaid……..
But not on terms that mean zambia loses its sovirenity , ……….
That fact that HEHH has not visited China yet says a lot…………
The Chinese will remain all weather friends of zambia, and zambia still needs china , but with this GRZ , it will be a mutually beneficial relationship.
#13 Tarino Orange
April 13, 2022 At 12:38 pm
“Spaka – This is why there was uproar when PF was borrowing because it was not Lazy Lungu borrowing but the country and this passed on to our grandchildren…”
Yes, a loan is a loan , and must be repaid……..
But not on terms that mean zambia loses its sovirenity , ……….
That fact that HEHH has not visited China yet says a lot…………
The Chinese will remain all weather friends of zambia, and zambia still needs china , but it will be a 2 way street now
According to press reports, Fitch credit rating agency is advising potential investors that a Zambia-IMF deal in the middle of 2022 is “optimistic”
They say a more realistic projection is 2023.
This is because the credit committee of Zambia’s bilateral and private lendors has not even been formed.
IMF board can only proceed if Zambia agrees conditions with this comittee, to which of course china is a major party.
So yes, china will surely come on board but at what cost to Zambia, especially that the new dawn govt has largely ignored them.
Chinese are good people compared to these murderers from the west with their institutions like IMF and world Bank. So the UPND government thought that the Chinese government can deal with the agents of the west, they can’t tolerate that nonsense. And those who are insinuating that China are bad people are liars, the fact is that China has never colonised any country and it is a fact that UK and Europe who colonized other countries especially Africa nations, not only did they just colonised us but they also murdered our people, in short the UK and Europe are murderers. That’s why whoever leader who associates himself with the west is the enemy of african masses and freedom fighters. China are our good friend.