Zambian President Hakainde Hichilema has asked French President Emmanuel Macron to use his global influence to help move forward a long-delayed restructuring of Zambia’s foreign debt, after its default in 2020.
Hichilema met with Macron in Paris on Wednesday, where he “emphasised the importance of closing debt talks and asked France to use its role to leverage the Paris Club of Creditors Committee and the G20 to ensure the speedy resolution of the debt restructuring,” according to a statement from the presidency.
The Paris Club is a group of creditors, chaired by the French president, who aim to find payment solutions for debtor countries.
Zambia has struggled to find a relief deal with creditors – to whom it owes an estimated 17.3 billion dollars (15.8 billion euros) – since it became the first African country unable to repay its foreign debts in the wake of the Covid-19 pandemic.
It sought help to restructure its debt through a G20 mechanism, which is co-chaired by France and China, but its implementation has been slow.
Weight of debt slowing down Zambia
The debt is “like a python around our necks, ribs and legs”, Hichilema said in an interview with the AFP news agency, after meeting with Macron.
We need to “close this long overdue debt re-structuring, put it to bed and release resources and time and attention to the development side of our agenda,” he said.
Hichilema’s office said that Macron was committed to having Zambia’s restructuring dealt with before a financial summit in France on June 22-23.
There was no immediate statement from Macron’s office on the meeting with Hichilema.
Finance Minister Situmbeko Musokotwane told Reuters in an interview last month that Zambia was being unfairly “punished” as restructuring talks dragged on.
Is China to blame?
The United States has accused Zambia’s biggest creditor, China – which is owed some 6.6 billion dollars (6 billion euros) – of dragging its feet, something Beijing denies.
“The Chinese premier and former premier confirmed that Chinese were committed to debt resolution for Zambia when I met them,” said the managing director of the International Monetary Fund, Kristalina Georgieva said.
Zambia secured 1.3 billion dollars in financing from the IMF in August. On Monday Georgieva said that the fund expects to disburse the next tranche of the plan “very soon”.
Ghana and Ethiopia have also sought to restructure their debts and Georgieva said the processes have been delayed by a “cacophony” caused by the diversification of creditors in recent years.
Some 19 out of 35 sub-Saharan African countries are at or close to the risk of debt distress, Georgieva said, citing the impact of the pandemic, Russia’s war in Ukraine, high interest rates and weaker currencies.
She ruled out the risk of Kenya slipping into default, despite acute pressure on its finances by rising debt repayment obligations.