Zambia’s finance minister rejected China’s appeal for the World Bank and other multilateral lenders to join a debt restructuring, warning that delays were stifling the economy, according to the Financial Times on Monday.
Situmbeko Musokotwane told the business publication that time is of the essence to complete a restructuring of about $13 billion in external debt this year, and that China’s demand was a distraction from talks to reduce the loans.
“Discussions at higher levels like those just make our situation worse, because what we are looking for is urgent solutions, not discussions that may drag out the matter,” the report quoted Musokotwane as saying.
Zambia became the first African government to default in the COVID-19 era in 2020, however the restructuring of its nearly $15 billion foreign debts with creditors such as China and Eurobond holders has been significantly delayed.
According to government figures, Zambia owed Chinese creditors approximately $6 billion of its overall $17 billion external debt as of the end of 2021.
Treasury Secretary Janet Yellen of the United States and the other members of the Group of Seven have grown increasingly irritated with China’s slow progress on debt rescheduling for countries seeking assistance.
China believes that multilateral organizations should also be made to accept reductions in debts they are owed.