Situmbeko Musokotwane, Zambia's finance minister, following an interview at his office in Lusaka, Zambia, on Thursday, May 5, 2022. China should head the creditors committee being formed to renegotiate Zambia’s $17.3 billion of foreign debt because that will help accelerate the resolution process, Musokotwane said. Photographer: Zinyange Auntony/Bloomberg
Zambia’s Finance Minister rejected a call from China for the World Bank and other multilateral lenders to join a restructuring of the country’s debt and warned that delays were holding up the economy, the Financial Times reported on Monday.
In an interview with the newspaper, Situmbeko Musokotwane said that “time is of the essence” to finish a restructuring of about $13 billion of external debt this year and signalled that China’s demand was a distraction from talks for reducing the loans.
“Discussions at higher levels like those just make our situation worse, because what we are looking for is urgent solutions, not discussions that may drag out the matter,” the report quoted Musokotwane as saying.
The People’s Bank of China and the Ministry of Finance both did not immediately respond to aReuters request for comment.
Zambia became the first African country to default in the COVID-19 era in 2020, but the restructuring of its external debts of almost $15 billion with creditors including China and Eurobond holders has been greatly delayed.
Government data showed Zambia owed Chinese creditors nearly $6 billion of the total $17 billion external debt at the end of 2021.
US Treasury Secretary Janet Yellen and other Group of Seven have grown increasingly frustrated about what they see as foot-dragging by China in moving forward on debt rescheduling for countries seeking help. China, for its part, argues that multilateral institutions should also be required to accept reductions in the debt they are owed.