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Chinese banks, Zambian officials hold debt negotiations

Published

10 months ago

February 3, 2024

According to the secretary of Zambia’s Treasury, Zambian officials travelled to China last week to talk about debt restructuring with representatives of the Chinese Export-Import Bank (EXIM) and a few Chinese commercial banks.

After its official creditors, notably China EXIM, rejected a preliminary restructuring plan for its Eurobonds in November, Felix Nkulukusa stated that Zambia was on track to achieve a new accord.

2020 saw Zambia’s sovereign debt default, and the G20’s Common Framework procedure for debt restructuring has been plagued by delays.

Debtor nations are expected to reach equivalent restructuring agreements with both commercial and official creditors under the framework.

The tentative agreement Zambia had struck with foreign bondholders in November was rejected by its official creditors, who said that more was required and that the agreement did not compare to the debt relief they had offered.

“We were in China last week. We went to meet with the private commercial creditors,” Nkulukusa told Reuters.
Earlier on Friday, at a public event on the economic outlook, he said, “We are on course. We are sharing our restructuring proposals, and we hope that sooner than later we are going to reach an agreement.”

Following the COVID-19 epidemic three years ago, Zambia experienced a recession as a result of its foreign debt default. The nation has since requested reorganisation from its bilateral creditors in order to stabilise its economy.

The International Monetary Fund estimates that at the end of 2022, Zambia owes China EXIM $4.1 billion and foreign bondholders $3.5 billion. It was due to other Chinese lenders about $1.8 billion.

Related Topics:Featured Felix Nkulukusa Zambia

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IMF mission concludes 4th loan program assessment in Egypt

Published

16 hours ago

November 22, 2024

Ifeoluwa Dada

Following the completion of a recent visit to Egypt, the International Monetary Fund (IMF) has announced that its mission had achieved significant strides in policy talks aimed at concluding the fourth review of the IMF loan program.

The review is the fourth in Egypt’s most recent 46-month IMF loan program, which was authorised in 2022 and increased to $8 billion this year following an economic crisis characterised by high inflation and chronic foreign exchange shortages. It may unleash more than $1.2 billion in financing.

Along with reaffirming its commitment to maintain a flexible exchange rate system, the IMF stated that Egypt “has implemented key reforms to preserve macroeconomic stability,” including the unification of the currency rate that facilitated imports.

Earlier on Wednesday, Egypt’s Prime Minister Mostafa Madbouly said Cairo has asked the IMF to modify the targets for the programme not only for this year, but for its full duration, he added without giving more details.

“Discussions will continue over the coming days to finalize agreement on the remaining policies and reforms that could support the completion of the fourth review,” the IMF added in its statement.

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Kenya seeks $750m from World Bank, obtains $200m from AfDB— Official

Published

2 days ago

November 20, 2024

Ifeoluwa Dada

The head of debt management for the finance ministry told Reuters that Kenya had obtained a $200 million loan from the African Development Bank (AfDB) and was negotiating a fresh $750 million loan with the World Bank.

After being forced to abandon proposed tax rises costing more than 346 billion shillings ($2.68 billion) in June due to fatal demonstrations, the East African nation’s administration, which has been grappling with significant debt, has been frantically seeking fresh funding.

The Finance Ministry’s public debt management office director general, Raphael Owino, told Reuters that the IMF’s October clearance of the seventh and eighth reviews, which opened the door for a $606 million loan tranche, had aided the ministry’s talks for more loans.

“The World Bank is coming on board, riding on the back of IMF receipts,” Owino said. “The AfDB is already on board.”

The discussions for more assistance, which came under the World Bank’s “Development Policy Operations” (DPO) with the government, were confirmed by a representative at the organization’s Kenya office.

“The amount of the current (loan) is yet to be determined. The amount will also depend on the implementation of the policy reforms agreed upon,” the spokesperson told Reuters, adding that past DPO loans averaged about $750 million.

In May, the World Bank approved the latest round of DPO loans, totalling $1.2 billion.

According to a statement made last month by Finance Minister John Mbadi, Kenya has set a foreign borrowing goal of 168 billion shillings for the fiscal year ending in June 2025.