China calls on Zambia’s creditors to share a “fair burden” in the country’s debt restructuring
China has urged Zambia’s additional creditors to bear a “fair burden” in the nation’s debt restructuring efforts.
This comes as the International Monetary Fund (IMF) and official creditors, including Beijing, have expressed reservations about a deal Zambia made with overseas bondholders.
Talks between Zambia and a bondholder committee are ongoing, with the country’s finance ministry confirming the discussions on Friday.
Doubts have been raised by the official creditor committee, co-chaired by China and France, along with the International Monetary Fund over the past several days.
No specific details were provided regarding these doubts. However, the campaign group Debt Justice conducted an analysis, revealing that if the deal proceeded, bondholders would receive a higher amount of money compared to official creditors.
“All creditors should work together and participate in Zambia’s debt disposal in accordance with the principle of ‘common action and fair burden’,” China’s Ministry of Foreign Affairs said on Monday in a faxed response to a Reuters question on the reservations about the bondholder deal.
After defaulting three years ago, Zambia recently reached an agreement in principle with a bondholder group in late October, securing a restructuring deal with official creditors less than two weeks prior.
“IMF Staff have been working with the authorities and their advisers to assess the implications of the proposed agreement in principle (AIP),” an IMF spokesperson said.
“Further discussions and modifications are needed to bring this initial proposal more fully into line with the requirements of the program. We understand that the authorities intend to discuss further with their creditors in the coming days,” he noted.
