President Hakainde Hichilema has arrived safely in Paris for the Summit for a New Global Financing Pact, where discussions on the debt restructuring deal are set to take place. Alongside other world leaders, President Hichilema will engage in deliberations on various issues, with a primary focus on “Building a new consensus for a more inclusive international financial system.”
President Hichilema expressed confidence that his government will secure a debt restructuring plan during talks with official creditors in Paris this week. Zambia became the first African nation to default on its foreign debt in 2020, with the outstanding amount officially standing at $18.6 billion since the onset of the Covid-19 pandemic.
Seeking assistance to restructure its debt, Zambia turned to the G20 mechanism, co-chaired by Paris and Beijing. However, the implementation of the plan has faced delays. President Hichilema announced during a press conference in the Rwandan capital, Kigali, that an agreement was anticipated.
“The framework that we should agree on in the next few days, and the presence of other leaders, show our urgency to conclude,” President Hichilema stated. He expressed the desire to conclude Zambia’s debt restructuring and emphasized that the process has been ongoing for too long. Describing the debt as a burden akin to a “python crippling us in the neck, the ribs, and the legs,” Hichilema emphasized the pressing need for resolution.
The international community has closely monitored Zambia’s debt restructuring journey. The United States has been actively engaged in the process, urging China, Zambia’s largest creditor, to facilitate a swift resolution. The progress made so far has been encouraging, with the US Treasury expressing hope for an agreement on official bilateral creditors in the near future.
Negotiations on debt restructuring, a crucial step toward unlocking the IMF’s aid plan for Zambia, have been underway for two years. The Paris Club, an informal group of official creditors responsible for finding solutions for countries struggling with debt repayment, began its meetings on Wednesday, preceding the summit in Paris, which aims to devise strategies for reforming global financing in the face of climate change.
President Hichilema expressed hope that his presence in France, alongside French President Emmanuel Macron and Chinese Premier Li Qiang, would expedite the process. He emphasized the need for unity among the three leaders, suggesting that an imminent announcement of a debt restructuring deal is on the horizon.
Zambia’s successful debt restructuring could serve as a model for other countries facing similar challenges. President Hichilema believes that if an agreement is reached, the G20’s Common Framework for debt restructuring, involving traditional lenders from the Paris Club as well as new lenders like China and bondholders, can be expanded to assist other nations in addressing their debt burdens.