Zambia

A senior U.S. Treasury official on Monday said there were signs of "potential improvement" in sovereign debt restructuring cases and more vulnerable countries were expected to seek help, but further work was needed to accelerate the process, Reuters reported. Treasury Assistant Secretary for International Finance Brent Neiman noted advances in the cases of Zambia, Ghana and Sri Lanka over the past year, along with development of new technical approaches, adding his hope that Ghana would reach agreement on its external restructuring in the coming weeks.

Zambia’s official creditor committee plans to sign a memorandum of understanding to restructure $6.3 billion of debt by the close of the International Monetary Fund’s annual meeting next week, Bloomberg News reported. The nation’s dollar bonds rallied. The government has made slow progress in talks since June, when it reached a deal-in-principle with the committee co-led by China and France. The agreement would see the interest rates cut to as low as 1% and the loans only repaid in 2043, with a 40% reduction in net-present value of the debt.

Zambia has clinched a deal to restructure more than $6 billion in debts owed to other governments, a French official said on Thursday in a long-awaited breakthrough to ease pressure on the southern African country's strained public finances, Reuters reported. Zambia in 2020 became the first African country to default on its sovereign debt during the COVID-19 pandemic and has struggled since in protracted negotiations to agree a deal on the $12.8 billion of external debt it was trying to restructure.

The main hurdle for the completion of the International Monetary Fund's first review of Zambia's $1.3 billion program is an agreement with its official creditor committee, the IMF said on Thursday, Reuters reported. Julie Kozack, spokesperson for the IMF, said discussions between Zambia and its official creditors were happening "as we speak" and the fund was encouraged by those, while "we hope an agreement will be reached very soon on a debt treatment." Read more.

Zambia's official creditors, which include China, are getting closer to signing a memorandum of understanding on debt relief to the country in May, in what would be a key step needed to pave the way for more IMF funding, sources told Reuters. Zambia has been in default since 2020 when it became one of the first major sovereign casualties of the COVID-19 pandemic era, though progress in overhauling its debt burden has been slow. Zambia's external debt amounted to $18.6 billion by end-2022, according to government data, with China being its biggest bilateral creditor.

Zambia is planning to finish tests that simulate real-world cryptocurrency usage by the end of June to help it create regulations that balance citizens' safety with innovation, science and technology minister Felix Mutati told Reuters. The southern African country also needs digital infrastructure, including digital identities, before cryptocurrencies can be introduced, Mutati said in an interview on Wednesday.

Zambian President Hakainde Hichilema said China and the U.S. have a responsibility to set aside their differences and help countries such as his get the debt relief they need to avoid further damage to their economies, WSJ Pro Bankruptcy reported. With finance officials from around the world gathering in Washington this week for the International Monetary Fund and World Bank biannual meetings, Mr. Hichilema’s country is emerging as a focal point of discussions on how to restructure poor nations’ debts. U.S.

Default-stricken Zambia published figures on Wednesday showing that its total public debt stock climbed to $32.8 billion, including interest arrears at the end of last year, of which $18.6 billion was external, Reuters reported. At the end of June 2022 its total debt including interest arrears was $32.5 billion, with $17.5 billion external. Zambia has been looking to restructure its debt after becoming the first African country to default during the COVID-19 pandemic in late 2020.

Zambia's official sector creditors met on Thursday to discuss the type of debt relief to offer the country, Finance Minister Situmbeko Musoktwane told Reuters. Zambia became the first African sovereign default in the COVID-19 era in late 2020 and has been struggling to restructure debt that reached 133% of GDP at the end of 2021, which analysts have blamed partly on the high number and diversity of creditors.

The International Monetary Fund has urged default-stricken Zambia to strike a debt restructuring deal with its international creditors as soon as possible and will make a formal assessment of its predicament in spring next year, Reuters reported.