Zambia Strikes Debt Deal with China, India, Signalling Economic Rebound

President Hakainde Hichilema has announced that Zambia has secured a debt restructuring deal with two of its biggest creditors, India and China. He announced this development at the Nc’wala Traditional Ceremony for the Ngoni people in Chipata District, saying, “The last two countries that had not signed [deals as] official creditors, China and India, have signed, and I’m very pleased to indicate that.”

The deal is a major advance for the country, signalling the start of its journey to economic recovery since being the first African country to default on its loans in late 2020. The years since have seen debt restructuring talks fall through. Last year, Zambia agreed to restructure $6.3 billion owed to official lenders. However, this progress was halted when China, the single largest creditor, rejected a proposed deal between Zambia and bondholders. Zambia must strike agreements with its creditors to keep the $1.3 billion IMF bailout flowing and kickstart its economic revival. President Hichilema is optimistic about attracting additional foreign investments to the nation's copper mines.

This news comes after President Hichilema led an economic growth forum with partners from the International Monetary Fund (IMF) and the International Growth Centre (IGC) to exchange ideas about how to optimise Zambia’s development. Emmanuel Zulu, a member of the Civil Society Debt Alliance, said the deal could benefit Zambia's credit rating, and allow the country to pursue financial support from organisations such as the IMF.

Also bringing a sense of stability to the country is the news of the Kwacha’s performance in 2024, which is currently on its longest winning streak in almost a year. On Thursday, the Kwacha became Africa’s best performing currency against the US dollar, aided by the government’s decision to increase interest rates and mandate that the central bank retain money in the reserve.

President Hichilema, optimistic about the agreements signed by the country’s two biggest creditors, said, “Now we are turning our attention to the private creditors that we hope to be able to put to bed soon.”