China calls on Zambia’s other creditors to shoulder ‘fair burden’ in debt restructuring talks

China has called on Zambia’s other creditors to shoulder a “fair burden” in the country’s debt restructuring exercise.

This was after the Internationql Monetary Fund (IMF) and official creditors including Beijing “expressed reservations” about a deal Zambia struck with overseas bondholders.

Reuters reported that Zambia and a bondholder committee were continuing talks, the country’s finance ministry said on Friday.

This was after the official creditor committee co-chaired by China and France and the IMF had voiced their doubts over the “last several days”.

It did not give any details of what these doubts were, but campaign group Debt Justice calculated that bondholders would receive more money back than official creditors if the deal went ahead.

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

Read More: Debt Crisis: Zambia formalizes June agreement with Official Creditors Committee

Zambia defaulted three years ago and finally clinched an agreement in principle with a bondholder group in late October, less than two weeks after reaching a restructuring deal with official creditors.

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

Part of the statement read: further discussions and modifications are needed to bring this initial proposal more fully into line with the requirements of the program.

The Fund said it understood that the authorities intend to discuss further with their creditors in the coming days.

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