G20 leaders applaud Zambia, Ghana debt restructuring progress

Finance leaders from the Group of 20 (G20) major economies have welcomed “advanced work” toward the finalisation of a Memorandum of Understanding (MoU) for Zambia’s debt treatment and “ongoing progress” in the case of Ghana.

According to a report by Reuters, the G20 leaders also called for a “swift conclusion” of debt talks underway for Ethiopia and Sri Lanka.

In a draft communique seen by Reuters, the leaders encouraged efforts of Global Sovereign Debt Roundtable participants to strengthen communication.

It also encouraged them to foster a common understanding among key stakeholders, both within and outside the G20 Common Framework to facilitate debt relief plans.

On Saturday Finance and National Planning Minister, Situmbeko Musokotwane, announced that Zambia had entered into an agreement with its Official Creditors Committee (OCC) paving the way for debt treatment completion as agreed in June, 2023.

Zambia’s OCC was co-chaired by China and France, and Vice-Chaired by South Africa.

Read more: Analyst, Mubanga, doubts MoU on debt restructuring will restore Zambia’s fiscal stability

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 MoU.

“Following the signing of the MoU, the terms will be implemented through bilateral agreements with each member of the OCC,” Musokotwane said.

Government said it 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.

Meanwhile, Ghana also announced that it had secured financing assurances from China and France for debt restructuring agreement.

Its Finance Minister, Ken Ofori-Atta, announced that this meant that both China and France were willing to work positively with Ghana on restructuring its debt.

Ofori-Atta mentioned that Ghana had engaged with the Central Bank Governor of China and had not encountered any opposition or reluctance regarding the MoU for debt restructuring.

He also pointed out that the Chinese government had been involved in similar debt restructuring deals with other countries, such as Zambia, Sri Lanka, and Suriname, and he expected cooperation from China in Ghana’s case as well.

“We have met the Central Bank Governor of China and we don’t perceive any opposition or reluctance in participating positively when it comes to the MoU on restructuring of our external bilateral debts.

“The Chinese government within the past months is close to reaching a similar deal with Zambia, Sri Lanka and Suriname, so following that trend, we expect some similar cooperation from them when it comes to Ghana. We have made tremendous progress under this framework compared to other countries on a similar path,” he said.