Zambia sent bondholders debt restructuring proposal, finance ministry says

The ministry of finance and national planning said Friday that Zambia presented its bondholders a “concrete proposal” to restructure $3 billion in eurobonds last week.

“We continue to engage actively with our bondholders and proposals are being exchanged,” the government said to Reuters.

It “represents our commitment to finding a resolution that is acceptable to all parties and within the parameters set out by the IMF debt sustainability analysis.”

The proposal was unspecified.

Zambia’s external debt reached $17 billion in 2021, with one-third owed to China, according to government figures.

Zambia defaulted on its overseas debt in 2020 and is restructuring with bilateral creditors and private bondholders, but talks have stalled due to disagreements on debt reduction.

This week’s IMF and World Bank spring meetings in Washington focused on debt relief for struggling developing market nations.

“Debt service is becoming a serious challenge,” Sierra Leone Finance Minister Sheku A.F. Bangura said Saturday in Washington. “It’s squeezing out our social infrastructure investment, mostly education and health. We must unite internationally to respond more forcefully. Global action is needed.”