Chinese Debt Nearly Twice Original Estimates

The country’s debt to China is likely to be almost double previous estimates, a new report has revealed.

The report, carried out by the John Hopkins’ Chinese Africa Research Initiative, has estimated that the nation’s total debts to the Asian nation totals at least $6.6 billion and is spread across 18 creditors. Previous figures had estimated that total debt to China sat at $3.4 billion.

The findings demonstrate that the previous Patriotic Front government had not been totally transparent about how much they owed to Chinese creditors. This, combined with mismanaged spending under the previous government has left the country’s economy in a state of disrepair, with 30% of the government’s total income being spent on interest repayments.

With a large portion of its total debt being owed to China, restructuring talks could be made increasingly difficult for creditors.

“Given the complicated situation with at least 18 Chinese lenders having provided external loan funding to the Zambian government and its state-owned firms, reaching consensus on burden-sharing is likely to prove exceptionally difficult,” the report outlined.

The report also confirmed that the previous government had recorded some of its Chinese debts in a category called “Others”, which made up nearly a third of public external borrowing. The Chinese embassy in Lusaka declined to comment.