Zambia’s finance minister said on Saturday it is still unclear who will be leading talks for renegotiating its nearly $6 billion debt with China, the largest bilateral creditor of the first African sovereign default in 2020 after the COVID-19 pandemic hit.
China co-chairs a committee of official bilateral creditors with France as part of a debt restructuring that Zambia is seeking under the Group of 20’s Common Framework, a platform for highly indebted countries to rework their debt with bilateral creditors.
“It is up to the Chinese authorities to choose who they want to represent them,” Situmbeko Musokotwane said in an interview with Reuters on the sidelines of the International Monetary Fund and World Bank annual meetings in Washington.
“I don’t know at this particular moment,” he said, when asked who represents China on the official creditors committee.
Western countries this week ratcheted up their criticism of China, the world’s largest bilateral creditor, as the main obstacle to moving ahead with debt restructuring agreements for the growing number of countries unable to service their debts.
At the end of 2021, China held about a third of Zambia’s $17.27 billion international debt, according to Zambian government data.
Since then, Zambia has cancelled $2 billion in undisbursed loans, many from Chinese lenders.
Musokotwane said negotiating with bilateral creditors including China before private creditors had “worked fairly well”, but acknowledged there had been complaints from international investors who hold the country’s sovereign bonds.
“It cannot be plain sailing because people approach it from different perspectives,” he added.
Zambia secured a three-year $1.3 billion loan from the IMF in September.
It is now seeking a present value $6.3 billion debt reduction, or 49% of the external debt being restructured.
Some bondholders had previously said a 45% cut would be unacceptable.
“There is no point of pretending that there is something that is better, when doing so means that you leave Zambia still with an unsustainable debt situation,” Musokotwane said.
“Because it means we will conclude today, then a month later or three months later, we default again.”
Zambian grain exports could help to address shortages caused by Russia’s invasion of Ukraine, Musokotwane said, adding that the government was hoping to host an overseas agriculture investors forum in the middle of 2023.
“We are making preparations for investors not just in Zambia, but from outside to take advantage of the land resources that we have, to come and produce food to export,” he said.
The country is ready to open up to 100,000 hectares for this investment plan, and will start using a $300 million World Bank approved loan to improve roads, electricity and dams to attract overseas investors.
“Three or four” companies have expressed interest in acquiring Mopani copper mine, he said, including South Africa’s Sibanye Stillwater, adding the interest was “what gives me the confidence that by the end of this year probably we should have a solution”.
A proposal for the government to have “golden shares” in mining companies would enable it to veto any investors known to not be credible, he said.
The government is assuming an average copper price of $7,500 per tonne in 2023, with growing demand thanks to green technologies likely to support prices, Musokotwane said.
When is our beloved president going to visit China, our largest creditor. Should we only be content with a few phone calls we have made in the past concerning our debt? The Chinese drag their feet on our indebtedness because we think they don’t matter as much as the West does.
HH was naive and showed bad judgment when he was cosying up with western diplomatic missions in Lusaka, thanking them and completely ignoring China in the first six months of his presidency. When he should have kept a balance. The truth is that China has the upper hand and no western nation can push or force it to move the needle. China can play hardball and slow the process just to show its power. The president, Finance Minister & Foreign Affairs Ministers need to pull up their socks.
And his boss busy with his western friends, After you have treated the Chinese like fo.ols honestly to go back and ask for help without shame. Go to America and ask them to assist .
…. “” Musokotwane said negotiating with bilateral creditors including China before private creditors had “worked fairly well”, but acknowledged there had been complaints from international investors who hold the country’s sovereign bonds…. “”
Well, they have the right to complain and be angry. You did not keep them in the loop. They are investors who want transparency and now don’t trust the Zambia negotiating team including the president. This, going by Bloomberg-news-feeds reports.
Very dumb government. They thought muzungu will save them
I respect this Minister of Finance, just by his words in the recent past, that the biggest problem Zambia faces is the huge unemployment levels. Just by him identifying and pointing out this hard fact gives me a lot of hope.
Msoqtwane and HH are trying to set us free from the debt slavery that PF sold us into. So please don’t attack these guys they’re not the problem.
“Zambian grain exports could help to address shortages caused by Russia’s invasion of Ukraine, Musokotwane said, adding that the government was hoping to host an overseas agriculture investors forum in the middle of 2023.”
This is what really annoys me about us Africans …opportunity is there, the market is ready and waiting, we have the land but we are busy waiting for overseas agriculture investors. Why can we do it ourselves with our own funding and commerical farmers?
The Chinese thrive when a rich country is run by tin pot dictators………….
The Chinese bankrol tin pot dictators who in turn clampdown on democracy……….while the Chinese shower the same tin pot dictators with loans as development , making sure the country is indebted to China for generations…….
Don’t think the Chinese care about zambias welfare , they are only intrested in making money for China…..and where they can enact large chines population transfers as the case in zambia…….
The president is absolutely right in claiming back zambias sovereignty from the Chinese.
China could be coming up to be the richest country , but zambia must have a Zambian agenda and identity that has interests of zambia first……..
The concerned of the west is Predatory Lending from China because political parties fail to look after GRZ. The west is looking out for a common investor.
Political parties willing to use their position to benefit personal relationships over the overall GRZ objectives.
#8 Spaka is the only person who has written an intelligent comment.
#7 Tarino Orange, Zambia has the land but not the money, do you realise the level of finance required. Zambia is broke with mountains of debt.
Regarding HH and China, why should he go grovelling to them, they were happy when he was arrested and jailed, they did not care. Who cared about him during those repressive times, it was the West and Lady Scotland in particular who was rallying support for him.
China should be told we are going to pay you when it suits us.
How much money do you need to grow wheat..this is not like mining it just needs proper planning? Mwanawasa was growing Winter maize in Zambia during the dry season when there was no money. You want the overeseas investor to come with his GMO seeds get land for free not pay tax for 5 years …export everything and all you’ll get is jobs as labourers.
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