Zambia’s long-awaited debt restructuring faces fresh obstacles as disagreements with the African Export-Import Bank (Afreximbank) continue to hold back progress. The southern African nation, which defaulted on its external debt in 2020, has been negotiating with bilateral and commercial creditors under the G20 Common Framework but has struggled to finalize terms.
Government officials confirmed that while talks with major lenders, including China and bondholders, have made headway, Afreximbank’s position on the treatment of its loans remains unresolved. Bloomberg reported that the regional lender has pushed for preferential treatment on its claims, complicating Zambia’s efforts to strike a comprehensive deal.
Analysts say the snag could delay disbursements under Zambia’s $1.3 billion IMF Extended Credit Facility, which hinges on debt relief commitments. Reuters highlighted that the IMF has warned delays in restructuring risk undermining Zambia’s economic recovery, with inflation at 12.4% in August and growth forecasts under pressure.
Finance Minister Situmbeko Musokotwane has reiterated the government’s determination to finalize agreements, stressing that Zambia “cannot afford to backtrack” on restructuring efforts. The standoff with Afreximbank, however, underscores the complexities of balancing creditor interests while restoring debt sustainability.
