Zambian Debt to Chinese Lenders May Be More Than Disclosed

Zambia may owe Chinese creditors almost double the amount the government has previously disclosed, complicating restructuring negotiations, a study found, Bloomberg News reported. The Johns Hopkins’ China Africa Research Initiative estimates the nation’s total liabilities to Chinese lenders at $6.6 billion and spread across at least 18 creditors, according to a report published on Tuesday. That compares with an official figure of $3.4 billion. The finding doesn’t mean that Zambia’s total external public and publicly guaranteed debt is bigger than the $14.3 billion reported as of December 2020, according to the report by Deborah Brautigam and Yinxuan Wang. It does show, however, that the government wasn’t transparent about how much of that was owed to Chinese creditors, they said. Zambia’s government says it followed normal procedures. The large proportion of debt to China could make restructuring talks more fraught for creditors including the holders of $3 billion in dollar bonds. Zambia became Africa’s first coronavirus-era default in November, and new President Hakainde Hichilema is pushing for a quick agreement for support from the International Monetary Fund to allow for the talks to proceed. Read more.