South Africa Offers to Co-Chair Zambia’s Creditor Committee
South Africa Offers to Co-Chair Zambia’s Creditor Committee
South Africa has indicated its interest in co-chairing Zambia’s official creditors committee together with France, the nation’s finance ministry said.
France made the request to Africa’s most industrialized economy in January, the finance ministry said in response to emailed questions Saturday.
Zambia is seeking to restructure as much as $17.3 billion of external debt after it in 2020 became the first African nation to default in the pandemic era. The formation of a creditor committee has stalled progress in its plans to rework the debts and secure a crucial $1.4 billion bailout deal with the International Monetary Fund, with China committing to join the creditor panel this month.
While Zambia owes France no debt, according to official finance ministry data, the European nation hosts the secretariat of the Paris Club, a group of rich countries set up to help revamp debts of poorer nations. China, which accounts for more than one-third of Zambia’s external debt, isn’t a full member and neither is South Africa. Zambia owes $475 million to South African state-owned lenders Development Bank of Southern Africa and the Industrial Development Corp., according to finance ministry data.
Zambia’s creditors committee is yet to form, South Africa’s finance ministry said. Once China formally informs the Paris Club of its intention to co-chair the committee, South Africa will then be informed officially of its role, if any, it said.
“South Africa believes that its strong economic and political relationship with the Zambian government put it in a position to be a strong and credible broker between the creditors and the borrower,” the finance ministry said.
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