Zambia signed a debt restructuring deal with France, extending $13 billion repayments by 12 years, marking a key step in economic recovery post-default.
Zambia has signed a significant debt restructuring agreement with France, marking a crucial milestone in the country’s efforts to revamp approximately $13 billion in external debt. This process began after Zambia defaulted on its debt four years ago during the COVID-19 pandemic, becoming the first African nation to do so at that time.
At the signing ceremony held in Lusaka, Zambia’s Finance Minister, Situmbeko Musokotwane, hailed the agreement as a major turning point for the country’s economic recovery. “Three years ago, Zambia was a basket case,” Musokotwane said. “What we are signing here this evening is really a landmark.”
The deal is Zambia’s first bilateral debt restructuring agreement, and it involves official creditors from various countries, including China, Saudi Arabia, and India. It is also the first restructuring under the Group of 20’s Common Framework for debt treatment, a system that has faced criticism for being slow in coordinating diverse creditor groups.
As part of the agreement, Zambia has extended the maturity of its debt by an average of 12 years, pushing repayment deadlines to beyond 2040. Interest rates will remain at 1% for the next 14 years, with a maximum cap of 2.5% thereafter, according to Musokotwane.
This landmark agreement is a critical step forward for Zambia as it continues its broader efforts to restore financial stability and secure long-term economic growth.
