Zambia aims to agree conditions for debt relief by first quarter

LUSAKA (Reuters) – Zambia hopes to agree on key conditions for restructuring $3 billion of its bonds no later than the first quarter of 2024, Secretary to the Treasury Felix Nkulukusa said on Thursday.

Debtor countries are meant to agree comparable restructuring deals with official and commercial creditors under the G20’s Common Framework process, which was established in 2020 in response to the COVID-19 pandemic.

“Before we go to the (bondholder) steering committee, we have to agree on what we mean by comparability of treatment,” Nkulukusa said.

“This should be concluded not later than the first quarter of 2024,” he added.

In a major setback for Zambia, its official creditors, which include China and members of the Paris Club of creditor nations, rejected a preliminary restructuring deal in November.

They argued that the deal with bondholders, which was approved by the International Monetary Fund (IMF), did not offer comparable debt relief to what they were offering.

Zambia, which is one of the African continent’s largest copper producers, defaulted on its debts three years ago during the COVID-19 pandemic, and its restructuring efforts have been beset by delays.

(Reporting by Chris Mfula; Writing by Anait Miridzhanian; Editing by Alex Richardson, William Maclean and Alexander Smith)