The United States recently pledged to pressure Zambia’s creditors, including China, to relieve the defaulting southern African country’s massive debt burden as it attempts to restructure its borrowings.
We will continue to press for significant participation by major creditors, both bilateral and private sector, in providing debt relief to Zambia, particularly China,” said U.S. Treasury Secretary Janet Yellen, who is visiting Lusaka as part of a 10-day trip to Africa.
The “treatment of Zambia’s debt is a top priority for the Treasury,” she added after a meeting with Zambian Finance Minister Situmbeko Musokotwane.
She also met with President Hakainde Hichilema. Hichilema said he hoped the country’s debt restructuring would be completed in the next two months: “As long as we do not resolve this issue, it will distort the progress we have made so far.
In 2020, Zambia became the first African country to default on its foreign debt – estimated at $17.3 billion – since the start of the Covid-19 pandemic.
Its debt had exploded under Edgar Lungu, who borrowed massively to finance a frenzy of infrastructure projects during his six years in office.
President Hichilema, elected in 2021 on promises to root out corruption and resuscitate the economy, has improved the country’s relations with its creditors and international donors.
The IMF and World Bank have released aid. The G20 also agreed on a “common framework” for restructuring the debt of the poorest countries, but its implementation is slow. The United States accuses China, the largest creditor of many African countries, of slowing down the process.
The Biden administration is trying to regain influence in Africa, the arena of fierce economic and political competition between major powers.