Zambia remains in touch with China and all its other creditors as it continues to negotiate a debt restructuring, finance minister Situmbeko Musokotwane said at an International Monetary Fund press conference on Saturday.
There is no alternative for Zambia, the first African country to default in the COVID-19 era in 2020, to the much-delayed Common Framework process for negotiating the restructuring, he said.
Zambia secured a $1.3 billion, three-year loan from the IMF in September. It is now seeking a present value of $6.3 billion debt reduction or 49% of the external debt being restructured, a level some bondholders have said would be unacceptable.
Musokotwane said that the strike at South African rail and port operator Transnet showed more regional infrastructure was required, adding that international lenders had not previously appreciated Africa’s need for infrastructure.
“This is why, of course, when other lenders came on the scene promising infrastructure, those who are affected said, ‘Oh, this is exactly what we are looking for,” he said. “But, of course, perhaps they did so in their overzealousness.”
At the end of 2021, about a third of Zambia’s $17.27 billion external debt was held by China, much of it for infrastructure projects. Since then, $2 billion of undisbursed loans have been canceled, many from Chinese lenders.