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Zambia has entered into an agreement with its Official Creditors Committee (OCC) paving the way for debt treatment completion as agreed in June, 2023, authorities have announced.
Zambia’s OCC was co-chaired by China and France, and Vice-Chaired by South Africa.
Finance and National Planning Minister, Situmbeko Musokotwane, made the announcement in a statement issued in Lusaka on Saturday.
Musokotwane said the agreement formalised what was reached in June with official creditors and represented an important milestone in Zambia achieving long-term debt sustainability.
He said each official creditor would now begin their internal process to sign the Memorundum of Understanding (MOU).
“Following the signing of the MoU, the terms will be implemented through bilateral agreements with each member of the OCC,” Musokotwane said.
He said government was hopeful that the formalisation of the OCC agreement would further support the progress Zambia was making in achieving a comparable agreement with its private creditors to resolve the debt overhang.
Musokotwane said Zambia was continuing its good faith engagement with all its Commercial External Creditors (CEC).
“Government hopes to conclude restructuring agreements that would both respect Zambia’s need for debt relief and the comparability of treatment principle,” he said.
Musokotwane reiterated Zambia’s firm commitment to remain in arrears with its external commercial creditors until agreements compatible with the comparability of treatment principle are reached.
“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,” he said.
Musokotwane said Zambia was thankful to the multilateral partners, the International Monetary Fund, the World Bank and the African Development Bank, for their continuous support and substantial financial contribution to the development agenda.
He said the next step was to secure a comparable agreement with the private creditors.
The debt mountain was something like a python snake that was constricting our necks, says President Hakainde Hichilema upon his arrival from France after Zambia clinched a deal to restructure its debt in a long and protracted effort.”
“Our government committed to resolve the mounting debt suffocating our economy and we are proud of the immense progress we have made,” Musokotwane said.
He said once completed, debt restructuring would free up resources vital for the government to invest in the development agenda.
Musokotwane said the development agenda included first generation reforms, investment in human capital and job generation to reinvigorate our economy and create opportunities for the Zambian people.
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