JOHANNESBURG, Nov 30 (Reuters) – Zambia is pushing onerous to finish the restructuring of practically $15 billion of exterior debt within the first quarter of 2023 and is “in lively engagement” with its largest bilateral creditor China, Zambia’s finance minister mentioned in an interview on the Reuters NEXT convention.
Zambia defaulted on its sovereign debt in 2020 and the present authorities, which took energy final yr, has been on a quest to restructure its loans and rebuild an economic system ravaged by mismanagement below earlier administrations and COVID-19.
In August, Zambia received Worldwide Financial Fund (IMF) approval for $1.3 billion, three-year mortgage programme to assist it restructure money owed which the federal government mentioned stood at $14.87 billion on the finish of June 2022.
Zambia’s Finance Minister Situmbeko Musokotwane advised Reuters that China had sought clarification from the Zambian authorities and the IMF on their debt settlement, he mentioned.
“The Chinese language… are asking (for) quite a lot of clarifications, which us and the IMF are offering them,” Musokotwane mentioned.
China needs extra readability on the IMF assumptions on which the mortgage programme relies, he mentioned, since these are supposed to kind the premise of the restructuring negotiations between Zambia and all its collectors.
Zambia’s much-delayed debt restructuring is seen by analysts as a check case for what are anticipated to be a spate of defaults in poorer nations which have borrowed closely not solely within the capital markets but in addition from nations together with China.
On the finish of 2021, Chinese language collectors accounted for nearly $6 billion of Zambia’s exterior debt, which was then $17.27 billion.
The Export-Import Financial institution of China is representing all Chinese language collectors of their restructuring negotiations with Zambia, Musokotwane mentioned. These embody industrial banks, the Industrial & Industrial Financial institution of China (601398.SS), Jiangxi Financial institution (1916.HK) and China Minsheng Financial institution (600016.SS).
China’s Ministry of Overseas Affairs didn’t instantly reply to a request for remark.
Musokotwane added that personal collectors have been cooperating effectively in debt reduction discussions and that there had been a bondholder assembly this week.
Zambia’s authorities mentioned in October it wants a gift worth debt discount by 2027 of $6.3 billion, or 49% of the debt being restructured, to fulfill IMF targets, a degree some worldwide bondholders have beforehand mentioned could be unacceptable.
COPPER MINING
Musokotwane additionally mentioned he hoped to make an announcement by the primary quarter of subsequent yr about potential new buyers in Konkola Copper Mines (KCM) and Mopani Copper Mines (MCM).
“We hope that by first quarter of subsequent yr we must be there with a few of them. And likewise a number of the new investments which might be coming from the U.S. and different locations,” he mentioned.
Zambia’s earlier authorities put KCM into liquidation in 2019, triggering a authorized dispute with its guardian firm, Vedanta Sources, that’s now being settled out of court docket.
Zambia’s state-owned mining firm ZCCM Investments Holdings (ZCCM.LZ) took over MCM in 2021 from commodities large Glencore (GLEN.L), which mothballed its operations in 2020 resulting from weak copper costs.
The federal government is aiming to treble copper manufacturing to three million tonnes per yr throughout the subsequent decade in Africa’s second largest producer of the mineral.
To view the Reuters NEXT convention reside on Nov. 30 and Dec. 1, please click on right here.
Reporting by Rachel Savage and Bhargav Acharya, Extra reporting by Nelson Banya in Harare
Modifying by Alexander Successful and Raissa Kasolowsky
Our Requirements: The Thomson Reuters Belief Ideas.
