The Export-Import Bank of China (EximBank) will lead Beijing’s team to renegotiate nearly $6 billion of loans that Zambia owes to Chinese state-owned creditors, the country’s finance ministry told Reuters on Thursday.
EximBank, one of Beijing’s three policy banks and Zambia’s single largest Chinese creditor, is the linchpin in China’s Belt and Road Initiative (BRI) that oversees infrastructure lending.
“Negotiations with the committee are progressing well and the IMF/World Bank DSA (debt sustainability analysis) assumptions are one of the subjects under discussion,” the finance ministry said in a statement to Reuters.
China is Zambia’s largest bilateral creditor, accounting for 75% of what the country owes to nations, including France and India.
Creditors and investors are closely monitoring how China, the world’s largest bilateral lender, is managing debt negotiations around the world.
China has tended to offer debt relief by extending maturities rather than accepting writedowns on loans.
EximBank did not respond to a request for comment.
China and France agreed earlier this year to co-chair an official creditors committee to renegotiate Zambia’s bilateral debts but had not yet specified who would represent each country.
EximBank said in a statement on its website on Wednesday its vice president Zhang Wencai has discussed the Common Framework and debt issues with French Treasury officials during a recent visit to Paris, without providing any further details.
The policy bank has extended to Zambia more than half of Chinese loans while a $982 million loan was made jointly with the Industrial Commercial Bank of China (ICBC).
Western countries last month pointed to China as the principle obstacle for many nations unable to service their debt to moving ahead with debt-restructuring deals.
Ecuador announced in September it had agreed with China Development Bank and EximBank to extend maturities and reduce the amortization on $3.2 billion of loans.
Zambia said last month it was eager to accelerate debt restructuring talks with creditors under the Common Framework, a Group of 20 major economies initiative that has been criticized for slow results.
Lusaka’s administration is expecting to present a first restructuring proposal to official creditors before year-end.
Including commercial lending, Zambia government data showed it owed more than a third of its $17.27 billion external debt to Chinese lenders by end-2021.
This includes loans from Jiangxi Bank (1916.HK) and China Minsheng Bank (600016.SS).
EximBank-funded projects in the copper-rich nation range from roads and hydropower plants to military barracks and stadiums.
The bank also leads China’s team in Ethiopia’s bilateral debt talks, its state finance minister told Reuters last month.
EximBank committed to extending $7.7 billion across 31 loans to Ethiopia between 2007-2018, according to a Boston University database of Chinese lending to Africa.
That is around half of all Chinese lending pledged to Ethiopia since 2006.
In 2018, EximBank agreed to extend repayment on a loan worth at least $2.5 billion for a railway between Addis Ababa and Djibouti by 20 years.
Ethiopia’s Common Framework debt negotiations are delayed partly due to the civil war, though government and regional forces from Tigray agreed on Wednesday to cease hostilities in a diplomatic breakthrough.
China is at the mercy of the west at this moment in time………
The west , particularly the USA is jealous of the Chinese work ethic gor which there is no comparison.
Most of these nations that owe Chinese loans can be made to refuse to pay back the Chinese and the west can fuel xenophobia against the Chinese.
The west controls the global media and monetary space…………..their propaganda against any nation has far reaching consequences.
China is best off forming alliences with other nations resisting western hegemony and dominance……….because the west will not let China dominate and threaten their dominance.
Meanwhile chofunta hh decided to align himself with his whlte masters thinking they will save him or pay off debts. Instead they forced him to sign tough imf conditions which will make Zambian suffer. Hh is a fraud