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Africa
ChinaDiplomacy

China-Africa relations: Zambia on way to debt default as G20 relief plan comes too late

  • Common Framework agreement is designed to provide a lifeline for countries saddled with unsustainable debt levels
  • But many of Lusaka’s loans came from private lenders that are not fully covered by the deal

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Zambia’s economy has been hard hit by the coronavirus pandemic. Photo: AP
Jevans Nyabiage
An agreement struck on Friday by the Group of 20 (G20) on a common approach to waiving or restructuring developing nations’ debts came too late for Zambia, which is set to become the first country in Africa to default on its borrowings in the Covid-19 era.
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Finance ministers from the group of major and emerging nations, which includes China and the United States, approved the so-called Common Framework to provide a lifeline for countries saddled with unsustainable debt levels.

“We recognise that debt treatments beyond the Debt Service Suspension Initiative (DSSI) may be required on a case-by-case basis,” the ministers said in a statement. “All official bilateral creditors should implement this initiative fully and in a transparent manner.”

Zambia’s exports grew sharply in the third quarter due to an increase in demand for copper but the country remains mired in debt. Photo: Reuters
Zambia’s exports grew sharply in the third quarter due to an increase in demand for copper but the country remains mired in debt. Photo: Reuters
The DSSI, approved in April and extended in October, offers a temporary suspension of government-to-government debt repayments to 73 developing countries to help them weather the impact of the coronavirus pandemic. The repayments will not be waived, but delayed until June 30 next year.
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