Zambia Wants to Forgo $5 Billion in Contracted External Debt

Zambia will cancel or downsize project loans worth about $5 billion as the nation tries to rein in runaway external debt that’s been increasing its risk of default, Bloomberg News reported. The government has about $7 billion in pipeline external debt -- loans contracted but not yet disbursed -- and plans to slash this to about $2 billion, Finance Minister Bwalya Ng’andu said on Wednesday. That would add to Zambia’s existing external debt stock of $11.2 billion at the end of 2019, which the International Monetary Fund forecasts would rise to 66% of gross domestic product by the end of this year. External borrowing has soared from $1.7 billion a decade ago as the government embarked on an ambitious program to build roads, airports and increase electricity generation. Read more