PARIS (AP) Zambia and its government creditors, including China, have reached a deal to restructure $6.3 billion in loans, the French government announced Thursday on the sidelines of a global finance summit in Paris.. While a bailout agreement had already been reached with the International Monetary Fund (IMF), Zambia needed to restructure its debt to unlock much-needed funds. But its slow progress in restructuring talks has discouraged all but a handful of other struggling governments from seeking help under the Common Framework mechanism. GENEVA (17 April 2023): UN experts* are deeply concerned over delays in reaching an agreement on the restructuring of Zambia's debt and its corresponding negative human rights impact on peoples' lives. Yet the deal is complicated, officials arent talking on the record, and the terms are suspiciously murky. Following the global outbreak of the economically crippling COVID-19 pandemic and a sustained period of low copper prices, Zambia defaulted on its sovereign-debt obligations in November 2020 after missing a $42.5-million bond repayment. See here for a complete list of exchanges and delays. The statement did not, however, specify the amount by which they would be willing to lower the debt nor how the debt would be restructured. And it all started with one idea. Any changes made can be done at any time and will become effective at the end of the trial period, allowing you to retain full access for 4 weeks, even if you downgrade or cancel. China Will Help Restructure Zambia's Debt. What Exactly Does That Mean Lessons from Zambia's debt restructuring - The Africa Report.com Under the former administration headed by Edgar Chagwa Lungu, Zambia experienced considerable economic decline, with its debts surging, currency dramatically weakening and inflation surging amid an environment of severe corruption and economic mismanagement. Dan Kitwood/Pool via REUTERS Zambia : Minister of Finance's Detailed Explanation on the Debt If youd like to retain your premium access and save 20%, you can opt to pay annually at the end of the trial. personalising content and ads, providing social media features and to But with the global economy failing to pick up this year despite the easing of pandemic restrictions, many believe Zambias ideal route out of this debt quagmire is to convince its international creditors to write off a substantial portion of its debt. Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile. DEBT RESTRUCTURING, A REBIRTH FOR ZAMBIA June 25, 2023 LUSAKA - Government says the recently reached 6.3 billion U$ Dollar agreement on the restructuring of Zambia's debt with its official creditors is a rebirth that gives the country an opportunity to correct the debt situation. The debt earmarked for restructuring includes $1.3 billion in arrears, and private sector creditors are expected to do the same on the $6.8 billion owed to them. Ruritania discovers it can't pay its debts. But these must be cancelled permanently, not rolled over to the 2030s to fuel another debt crisis next decade. Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts. Zambia requests debt restructuring under G20 common framework Zambia confirms it has agreed debt restructuring with official You can still enjoy your subscription until the end of your current billing period. More than 700 firearms have been seized in a five-year operation by the UK's National Crime Agency (NCA) and Spain's Guardia Civil to prevent replica guns that can easily be converted into lethal weapons from entering Britain, the NCA said on Sunday. Zambia: Test Case for Debt Restructuring - allAfrica.com This expansion has been largely attributed to improvements in the performances of public administration, education, manufacturing, information technology, accommodation and food services. -. More than 700 firearms have been seized in a five-year operation by the UK's National Crime Agency (NCA) and Spain's Guardia Civil to prevent replica guns that can easily be converted into lethal weapons from entering Britain, the NCA said on Sunday. Growth has been too low to reduce rates of poverty, inequality, and malnutrition that are among the highest in the world. How it works: The history of sovereign debt restructuring is, in one sense, quite simple: Ruritania borrows money by issuing some kind of debt instrument. Our Standards: The Thomson Reuters Trust Principles. Our Standards: The Thomson Reuters Trust Principles. Focusing on companies including Adidas, H&M, Ikea, and Inditex and analysing corporate strategy, consumer trends, and regulatory changes, Helen also covers major supermarket groups like Ahold Delhaize, Carrefour, and Casino. If the IMF loan is used to pay off previous lenders, and further austerity is pushed on the people of Zambia, the crisis will continue for many years to come, Tim Jones, head of policy at Debt Justice, told the Guardian. Expert insights, analysis and smart data help you cut through the noise to spot trends, Check if your Privacy Policy | Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers. See here for a complete list of exchanges and delays. PARIS, June 23 (Reuters) - Zambia has struck a deal to restructure $6.3 billion in debt owed to governments abroad including China, in a breakthrough for indebted nations around the world. Zambia endured Africa's first COVID-era sovereign default in November 2020 after years of chronic government over-borrowing drove its debt burden above 120% of annual economic output. analyse how our Sites are used. Matthew Brooker Zambia's Debt Deal With China Is a Landmark Moment The restructuring of the African country's borrowings signals that China is ready to play by the developed world's rules. After years of delay, official creditors are finally cooperating to resolve distressed debt. Debt Justice, a charity seeking to build consensus to end exploitative debt, has also been notably vocal in supporting a debt write-off for Zambia. While the IMF is set to release $188m from its bailout package to support government spending, attention now turns to Zambia's private lenders. The IMF currently classifies Zambia as a country with weak debt-carrying capacity, though in its September 2022 assessment Zambia's DSA composite indicator was close to the "medium" threshold. "We expect that if all goes well, we should have agreement with creditors in the middle of next year," Musokotwane said in parliament ahead of the approval of the 2022 national budget. Late August saw the country receive approval for a $1.3-billion, three-year loan package from the IMF to help alleviate some of the burden, with an immediate payment of $185 million disbursed. France's President Emmanuel Macron, who played a pivotal role in persuading China to agree, hailed the deal as "historic". Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers. See here for a complete list of exchanges and delays. Our Standards: The Thomson Reuters Trust Principles. Explainer: What is China's position on restructuring debt - Reuters China held $5.78 billion of the external debt. Zambia's external debt includes around $3 billion in international bonds, $2.1 billion to multilateral lending agencies such as the IMF and another $3 billion to China and Chinese entities. Zambia reached an agreement in principle to restructure $6.3 billion of debt with bilateral lenders, setting a precedent for a growing list of countries struggling to service their liabilities. The nations dollar bonds rose. New forms of debt restructuring reward bad behaviour - The Economist It's thought that many planetary bodies in our solar system contain liquid water deep below their icy surfaces. Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology. Zambia expects to agree on a debt restructuring plan with creditors around the middle of next year after reaching a preliminary understanding for a program with the International Monetary Fund (IMF), Finance Minister Situmbeko Musokotwane said on Thursday. Copyright | Can France prevent tensions igniting again? "Zambia is in no position to reject any proposals between China and the World Bank," Zambia's finance ministry said in a statement published later on Monday, adding it hoped for a "successful debt restructuring early this year". Is It Time to Explore an Alternative to Fractional-Reserve Banking? But its debt obligations loom large, and the process of debt restructuring that began two years ago remains a distinct challenge to complete, with the government yet to achieve a resolution with commercial creditors surrounding the $3 billion held in eurobondsjust one example of what lies ahead for Lusaka. Zambia Wins Debt Relief, Sets Precedent for Stressed Nations Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile. A senior finance ministry official says Zambia's debt to the Industrial and Commercial Bank of China will be commercial, following a deal struck with bilateral creditors, including China, last week. Following months of talks, Zambia has now successfully agreed new repayment terms with its state creditors on up to $6.3bn (5bn) debt, including over $4bn owed to China. Video, Just Stop Oil deny protesting at Osborne wedding. We use Additionally, by demonstrating commitment to resolving its debt issues, Zambia becomes an increasingly attractive destination for foreign direct investment. For a full comparison of Standard and Premium Digital, click here. On this week's episode of IDEA GENERATION, Scooter Braun takes us on a journey from his days as a college dropout and party promoter in Atlanta, to becoming one of the most successful music executives on the planet. "The overall approach is to rein in on the debt, which starts with ceasing to borrow recklessly going forward, especially not borrow at high cost," Hichilema said during an interview with Reuters on the sidelines of the Mining Indaba conference in Cape Town. We are pushing as hard as we can to sign a memorandum of understanding with the official bilateral creditors. Zambia's bilateral creditors expect to make a debt restructuring proposal this week to the southern African country, an official with the Paris Club, which coordinates developed creditor nations . 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