Zambia's Quest For Debt Relief Continues Despite Last Year's Deal

By Adeyemi Adekunle

Zambia, a southern African country, is still grappling with nearly $7 billion of debt despite a deal with bilateral lenders last year that treated over $6 billion. The debt is owed to bondholders and commercial banks and has been a long and exhausting quest for debt relief. The country’s trials and tribulations are being closely watched by Ethiopia and Ghana, who are next in line for debt restructuring.

The deal with bondholders to restructure about $3 billion of debt last October was rejected by the official creditors, co-led by France, China, and South Africa. They argued that the terms Lusaka agreed with bondholders did not match the concessions the southern African country won from the official lenders.

Andrew Chibuye, the Country Senior Partner at PwC in Zambia, said that the country’s copper producers have been seeking debt relief for a long time. He added that it was crucial to find a solution to the debt crisis as it was preventing the country from accessing financing for essential infrastructure projects.

Zambia’s debt crisis has been exacerbated by the COVID-19 pandemic, which led to a decline in copper prices, the country’s main export. The government has been seeking a debt restructuring deal with creditors since last year, but progress has been slow.

The government has also been implementing austerity measures, including cutting spending and raising taxes, to reduce the country’s budget deficit. The measures have been met with resistance from citizens who have been hit hard by the economic downturn.

The situation in Zambia is not unique, as many African countries are grappling with debt crises. The African Development Bank has warned that the continent’s debt could reach $700 billion by the end of the year, up from $500 billion in 2020.

China-Africa Trade Topped $282 Billion in 2023

China’s trade with Africa grew 1.5% in 2023 to reach $282 billion, making Beijing the continent’s largest trading partner for 15 consecutive years. Chinese exports to African nations rose 7.5% to reach $173 billion in the past year, while Chinese imports from Africa totalled $109 billion, reflecting a 6.7% decline year on year, China’s customs department reported.

The figures highlight the growing economic ties between China and Africa, which have been strengthened by Beijing’s Belt and Road Initiative, aimed at boosting infrastructure development across the continent.

China has been investing heavily in African countries, providing financing for infrastructure projects, and buying commodities such as oil and minerals. However, the relationship has also been criticized for exploiting African resources and labour.

Cameroon Hosts ‘Made in Africa’ Expo

Cameroon is hosting an exhibition aimed at promoting African-made products and boosting trade within the continent. The event dubbed the ‘Made in Africa’ expo, is part of efforts to reduce the continent’s reliance on commodity exports and promote industrialization.

The African Continental Free Trade Area (AfCFTA), which came into effect in January, is expected to boost intra-African trade by eliminating tariffs on 90% of goods traded within the continent. The trade agreement is expected to create a market of 1.2 billion people with a combined GDP of $3 trillion.

Manufacturers at the expo are showcasing a range of products, from textiles and clothing to electronics and machinery. The event is also attracting buyers from other African countries and beyond.

The expo is a step in the right direction for African countries seeking to diversify their economies and reduce their dependence on commodity exports. It is also an opportunity for African manufacturers to showcase their products and compete with international brands.