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Zambia agrees $6.3 billion debt restructuring deal with bilateral creditors

Published

1 year ago

October 14, 2023

Zambia’s finance ministry Saturday said the country had agreed to a memorandum of understanding (MoU) with its bilateral creditors on restructuring about $6.3 billion of debt.

The agreement comes almost three years after the southern African country defaulted, being the first African country to default on its debt in the pandemic era.

The ministry, in a statement, said, “Each official creditor will now begin their internal process to sign the MoU. Following the signing of the MoU, the terms will be implemented through bilateral agreements with each member of the OCC (Official Creditor Committee).”

Last month, Zambian President, Hakainde Hichilema visited China as part of moves to restructure the country’s external debt. China is a major creditor to Zambia as around two-thirds of the $6.3 billion debt Zambia is seeking restructuring with is owed to the Export-Import Bank of China.

With interest rates set at 1% for the first 14 years and rising to up to 2.5% after that, the agreements will involve an average extension of debt maturities of more than 12 years. Increasing payments is possible if Zambia’s economy performs better than anticipated.

Zambia’s finance minister, Situmbeko Musokotwane, said, “The next step is to secure a comparable agreement with our private creditors.”

Musokotwane added, “We are grateful to all our official creditors, especially the co-chairs of the committee, China and France, and vice-chair South Africa, for their commitment to help resolve Zambia’s debt overhang.”

Compared to the over $6 billion that Zambia had owed to official creditors before to the debt restructuring, Zambia will pay about $750 million over the next ten years.

The ministry also stated that unless Zambia obtained a debt arrangement with provisions similar to the official creditor agreement, it was committed to continuing to be in arrears to its external commercial creditors.

Related Topics:Debt restructuring Featured IMF Zambia

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Moroccan annual inflation rises to 0.8% in November

Published

4 days ago

December 21, 2024

Ifeoluwa Dada

Morocco’s statistics office has confirmed that the country’s annual inflation rate, as determined by the consumer price index, increased from 0.7% in October to 0.8% in November.

Monthly, consumer prices decreased by 0.2% from October.

The primary driver of inflation, food costs, grew by 0.8% compared to the previous year, while non-food inflation climbed by 0.7%. Core inflation, which does not include more erratic items like food, increased 2.6% annually and 0.2% monthly.

According to the central bank, inflation is expected to average 1% this year, down from 6.1% last year.

Despite the Al-Haouz earthquake, a spike in inflation, and worldwide economic challenges, Morocco’s GDP grew by 3.4% in 2023.

A recovery in tourism, robust industrial exports, and rising private consumption—all bolstered by prudent macroeconomic policies—were the main drivers of growth.

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Nigeria’s $42bn foreign reserves enough for 9 months’ imports— Central Bank

Published

5 days ago

December 20, 2024

Ifeoluwa Dada

According to Olayemi Cardoso, Governor of the Central Bank of Nigeria (CBN), the nation’s $42.01 billion in foreign reserves can cover imports of goods and services for almost nine months.

Cardoso promised Nigerians improved economic fortunes in 2025 while addressing the Senate Committee on Banking, Insurance, and Other Financial Institutions yesterday in Abuja at the presentation of the performance index report.

Cardoso stated: “External Reserves rose from $ 38.35 billion it was on September 30, 2024, to $ 42.01 billion as of December 12, 2024”.

He clarified that third-party receipts in Q3 2024 and revenues from taxes connected to crude oil were the main drivers of the rise in foreign reserves during the specified time.

“We saw remarkable improvements in our trade balance and maintained a current account surplus,” he added.

“Our external reserves level can finance over 9.09 months of import of goods and services or 13.91 months only, higher than the international benchmark of 3.0 months and a robust buffer against shocks”.

On cash shortage, the CBN boss reiterated the N150 million fine against any branch of banks caught illegally distributing new Naira notes to currency hawkers and unscrupulous elements and said the Nigerian economy will improve in 2025 through policies and measures.

He predicted a stronger economic future: “Despite our economy’s challenges, there are clear reasons for optimism.

“The gradual stabilization of the forex market, ongoing banking sector recapitalization, and positive growth trends in key sectors, especially the services sector, indicate a path toward recovery and stability.”