The Chinese embassy in Zambia has refused to confirm or deny assertions that they are responsible for the delay in the finalization of a $1.4 billion credit facility (loan) that the Zambian government is pursuing with the International Monetary Fund – IMF.
The IMF loan which was initially planned for disbursements in the first quarter (January to March) of 2022 was rescheduled with Zambia’s finance Minister Situmbeko Musokotwane announcing a revised target of conclusion to mid year – June 2022, a date that is now looking to be too ambitious due to the confirmation that a credit committee to deliberate on Zambia’s debt restructuring request has not yet been formed.
IMF mission chief to Zambia Allison Holland told the Zambian Business Times – ZBT in an exclusive engagement that the timing as to when the Credit facility would be concluded depends on the Zambia governments getting the refinancing assurances from its creditors (the G20 credit committee)
Holland stated that “the precise timing will depend on when the [Zambian] authorities can secure the necessary financing assurances from creditors. This is why we encourage official creditors to come together as quickly as possible to form the official G20 creditor committee under the Common Framework”.
In an exclusive interview with Zambia Business Times – ZBT, a source at the Chinese embassy who asked not to be named stated that they are aware of the accusations but have no comment at the moment. The source however stated that they would revert after going through their internal processes needed to issue an official response.
Chinese funding to Zambia is quite visible with projects such as the Kenneth Kaunda International Airport in Lusaka, Simon Mwansa Kapwepwe International Airport on the Copperbelt, the Kafue Gorge Lower Power project etc
The complexity now is that there is a requirement that Zambia engages all its key creditors (China inclusive) under a common debt treatment framework to achieve debt restructuring. Zambia’s debt obligations to China is well over $3 billion and any deal to restructure Zambia’s overall debt will have to have input from China.
Unless Western lender’s agree to a 100% refinance to take over and then pay off Zambia’s debt to China, it remains to be seen how debt owed to both Western creditors and from the Chinese would eventually achieve common treatment, without the usual shadow boxing or tag of war between the two global power blocks which may be beyond Zambia’s finance ministers sphere of influence.
