Musings From Abroad

Major creditor, China, rallies support for Zambia’s debt restructuring

Published

1 year ago

November 13, 2023

Zambia’s major creditor, China, has called on the country’s other creditors to shoulder a “fair burden” amidst Zambia’s recent push for debt restructuring.

China’s call comes after a multilateral body, the International Monetary Fund (IMF) and official creditors “expressed reservations” over a deal Zambia struck with overseas bondholders.

Zambia’s finance ministry said on Friday that it, along with a bondholder committee, had continued talks after the official creditor committee, co-chaired by China, France and the International Monetary Fund, had voiced their doubts over the “last several days”.

An IMF spokesperson said in a statement late on Friday that “IMF Staff have been working with the authorities and their advisers to assess the implications of the proposed agreement in principle (AIP)”.

“Further discussions and modifications are needed to bring this initial proposal more fully into line with the requirements of the program. We understand that the authorities intend to discuss further with their creditors in the coming days”, the official added.

China’s Ministry of Foreign Affairs said on Monday, in a faxed response to a Reuters question on the reservations over the bondholder deal, that “all creditors should work together and participate in Zambia’s debt disposal under the principle of ‘common action and fair burden.”

Since the announcement of the deal in principle, the bonds have appreciated. But the news of the IMF and official creditors’ reservations has caused Zambia’s bonds to decline; the 2024-dated note was down more than 0.9 cents on the dollar to 63.036 cents when the news broke.

Borrowing increased during the pandemic to finance immediate public health needs and to protect lives and livelihoods. The debt situation in Africa is now compounded by the Russia-Ukraine conflict, undermining debt sustainability across African countries.

Being the first African country to default on its debt during the coronavirus pandemic, Zambia has struggled, especially around the country’s debt burden and complications with negotiating a way out with creditors like China, its biggest foreign creditor.

Related Topics:debt burden Featured President Xi Jinping Zambia

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Musings From Abroad

Swiss company Mercuria partners Zambia’s IDC in new metals trading firm

Published

1 day ago

December 21, 2024

Ifeoluwa Dada

According to a statement released by Swiss commodities trader, Mercuria, on Thursday, it has established a metals trading arm with Zambia, the second-largest producer of copper in Africa.

The trading unit is jointly owned by Mercuria and an arm of Zambia’s Industrial Development Company (IDC), and its purpose is to allow Zambia to engage directly in the minerals trading market.

The joint venture “envisages the establishment of a vehicle to market and trade Zambian copper by mutual leverage,” according to a statement from Cornwell Muleya, the CEO of IDC.

The southern African nation wants to increase copper output to roughly 3 million metric tonnes within the next ten years, and in 2023, it produced roughly 698,000 tonnes of copper, down from 763,000 metric tonnes the year before.

In June, the Zambian government announced that it would establish a minerals trading unit.

Investors including First Quantum Minerals and Barrick Gold are ramping up production, with output set to receive a further boost once Vedanta Resources’ Konkola Copper Mines restart activity.

“Our joint venture with IDC marks a significant milestone for Zambia as it positions itself more strategically in the global minerals market,” Kostas Bintas, Mercuria’s global head of metals and minerals, said in the statement.

Musings From Abroad

Blinken to reveal UN Sudan funding additions

Published

2 days ago

December 20, 2024

Ifeoluwa Dada

Additional financing for humanitarian aid to Sudan and initiatives to strengthen civil society in the nation, where a conflict has killed tens of thousands of people and displaced millions, will be announced by U.S. Secretary of State Antony Blinken at the United Nations on Thursday.

Blinken will make many announcements when he leads a UN Security Council meeting on Sudan on Thursday, which will centre on humanitarian aid and civilian protection, Deputy U.S. Representative to the UN Ned Price told reporters on Wednesday.

According to Price, the announcements would include more money for humanitarian help, initiatives to strengthen civil society, and the return of democracy.

“Sudan, unfortunately, has risked becoming a forgotten conflict,” Price said.

“So part of the reason the secretary … opted to convene a signature event on this very topic is to make sure it remains in the spotlight,” Price said.

For almost 18 months, the paramilitary Rapid Support Forces and Sudan’s army have been engaged in combat, resulting in a severe humanitarian crisis that has forced over 12 million people from their homes and made it difficult for U.N. organisations to provide aid.

A power struggle between the RSF and the Sudanese Armed Forces preceded a planned shift to civilian administration, which sparked the conflict in April 2023.

Although the army declined to join this year’s U.S.-mediated peace negotiations in Geneva, the warring parties did pledge to increase assistance access, which prevented any movement towards a ceasefire.

Price stated that before President Joe Biden’s term ends next month, the United States would keep collaborating with allies to enhance humanitarian access in Sudan and eventually end hostilities.

“We are going to leave nothing on the field in our efforts to work with allies, with partners, with the Sudanese stakeholders themselves, on the issues that matter most – humanitarian access, the provision of humanitarian assistance, ultimately, the process by which we can work to get to a cessation of hostilities, which is most urgently needed,” he said.