China Committed To Joining Zambia Creditor Committee – IMF

The IMF’s managing director Kristalina Georgieva has said that China is committed to joining Zambia’s creditor committee, soothing concerns raised by Finance Minister Situmbeko Musokotwane about delays to the country’s debt restructuring talks.

“We were very pleased to hear from Governor Yi Gang… a very specific commitment to join the creditor committee on Zambia and work expeditiously for debt resolution, Ms Georgieva said. 

Furthermore, Reuters reports that the governor of the Bank of China, Yi Gang, intends to co-chair the committee, which is tasked with restructuring Zambia’s foreign debts into a more sustainable and manageable payment plan.

The news follows comments by Mr Situmbeko on Thursday that the debt restructuring process had “stalled” and that the Zambian team had “come here to complain”. 

Reacting to the statement on China’s cooperation, Zimbabwean finance minister Mthuli Ncube tweeted, “this augurs well, for coordination, in resolving debt for various African countries”. 

Following the election of President Hakainde Hichilema, the New Dawn government has made striking a debt restructuring deal with the IMF a top priority. In December, the government was successful in securing a $1.4 billion staff level agreement for a three-year extended credit facility, raising hopes for a formal agreement by the middle of 2022. 

Under the previous Patriotic Front regime, Zambia’s foreign debts swelled to over $17 billion, of which more than one third is owned by Chinese state entities. Bringing China on board with debt restructuring talks will be critical to ensuring a more manageable repayment structure and enabling Zambia’s economic development.