Africa-Press – Zambia. China has committed to joining Zambia’s creditor committee, International Monetary Fund managing director Kristalina Georgieva said on Thursday, amid complaints from Zambia’s finance minister about delays to its debt restructuring.
People’s Bank of China governor Yi Gang said that China intended to co-chair the committee, two sources with knowledge of the International Monetary and Finance Committee meeting told Reuters.
“We were very pleased to hear from Governor Yi Gang… a very specific commitment to join the creditor committee on Zambia and work expeditiously for debt resolution,” said Georgieva at the International Monetary Fund (IMF) Spring Meetings.
She added that he had also committed to the Common Framework debt restructuring process, launched by the Group of 20 (G20) leading economies in 2020 in response to the coronavirus pandemic.
Zambia’s finance minister Situmbeko Musokotwane said at public events on Thursday that the debt restructuring process had “stalled” and that the Zambian team had “come here to complain.”
An IMF spokesperson said that they did not have any more details of Yi’s statement, noting that it was at a closed door meeting. “This augurs well, for coordination, in resolving debt for various African countries,” Zimbabwe’s finance minister Mthuli Ncube tweeted of the Chinese position.
Ethiopia and Chad also signed up to the Common Framework more than a year ago and have yet to receive debt relief. “China is a very significant lender to many of these low-income countries, and China needs to participate, along with the Paris Club and private creditors,” U.S. Treasury Secretary Janet Yellen said at a press conference before Georgieva’s.
“I’ve called on China to specifically for example participate right away in a meeting for Zambia that wishes to undergo debt restructuring. And I am hopeful that China will agree to play a more constructive role.”
China and Chinese entities held $5.78 billion of Zambia’s debt at the end of 2021, according to the most recent Zambian government data. Earlier, Dr Musokotwane complained over lack of progress on debt restructuring.
“We’ve been waiting for the committees to sit,” Dr. Musokotwane told IMF African Department director Abebe Selassie but added that the process has stalled.
“And while we are here I hope we can get some clarity from you and your colleagues from the World Bank on how we can move forward. Because for now it is stalled,” he continued. Zambia reached a staff level agreement with the IMF on a $1.4 billion, three-year credit facility in December 2021.
Dr Musokotwane, who also described the restructuring as a “stalemate,” told parliament on March 25 that the creditor committee would be announced “within the next few weeks” and has said he hopes for a formal IMF deal by mid-year. Selassie had asked what the international community could do to address what he described as the “unresolved… debt challenge.”
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