Published on : 19/11/2020 – 00:03
Having failed to meet a $ 42.5 million due to its Western creditors in October, Zambia admits it is having serious cash flow difficulties, but says it is not in default. Lusaka explains having deliberately chosen not to reimburse any lessor.
« All payables should be treated fairly According to the Governor of the Zambian Central Bank, Christopher Mvunga. Due to repay $ 42.5 million in October to private lenders, Zambia only had $ 36 million. Lusaka therefore chose not to favor neither Pierre nor Chang. The 2nd African producer of copper having both debts to Western and Chinese lenders.
Refusal of a moratorium by creditors
Arguing the difficulties caused by the coronavirus pandemic, Zambia asked for a 6-month moratorium from its private creditors in September. It was categorically refused, with lenders in the north fearing they would be overtaken by Chinese lenders. The purpose of recent statements by the Governor of the Zambian Central Bank is therefore to reassure them, by specifying that all creditors will be treated ” in the same way ».
This will not convince the private donors of the north, who ask the International Monetary Fund to intervene with Zambia, so that it clarifies the conditions of borrowing from China.
While waiting for the rise in copper prices, Zambia can hope to find some fresh air with the discussions of the G20, on a possible cancellation of the public debt. This would allow for a review of the repayment schedule to private creditors. With 12 billion dollars to repay in the short, medium and long terms, Zambia today has a debt ratio of 80%.
►Also read: Zambia: default threatens the country