Zambia’s official creditors led by China have agreed to provide debt relief to the southern African nation, paving the way for an IMF bailout and setting a precedent for how Beijing could work with other lenders to tackle the threat of a wave of defaults across emerging markets.A committee of creditors co-chaired by China and France said on Saturday that they were “committed to negotiate with the Republic of Zambia terms of a restructuring” under a G20 framework to co-ordinate debt relief.
Kristalina Georgieva, the IMF’s managing director, said that she was “very pleased to welcome” the commitment by the creditors, which will unlock a $1.3bn IMF loan to revive Zambia’s finances. Zambia still has to negotiate exact terms of the relief and reach a similar deal with private creditors.
“The support from the official creditor committee for Zambia’s envisaged IMF-supported programme, together with its commitment to negotiate debt restructuring terms, accordingly, provides the IMF with official financing assurances,” Georgieva added.