On Thursday, Zambia’s newly elected government revealed that it found $2bn more than it thought the country is owing foreign creditors.
The Chinese government alone is being owed $6bn, with the country’s external debt placed at more than $14bn at the middle of the year; the debt owed was more than 60% of Gross Domestic Product.
Hakainde Hichilema was sworn in as President in August after six attempts at the Presidency and he took over from the debt-ridden administration of Edgar Lungu. Hichilema, one of the country’s brightest economic minds has sought a bailout from the International Monetary Fund (IMF) after Zambia failed to pay its debt during the pandemic.
Zambia owes China $5.75bn in principal and the money amounts to $6.18bn when interests are added. Finance Minister Situmbeko Musokotwane told Parliament that the $14.48bn debt profile of the country was out of its stacking arrears.
Zambia, rich in resources but with a high percentage of poor people faced its first recession in 2020, since 1998. Its rate of inflation is also high – currently in double digits and Hichilema, with a proven record of economic successes as a businessman is expected to drive Zambia’s gradual return to financial stability.
The President engaged the IMF in how their debt can be restructured to allow ease and opportunities for them to build the economy.
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