Zambia’s newly elected government announced on Thursday that it owes foreign creditors $2 billion more than previously estimated, with China alone owing more than $6 billion.
External debt in the resource-rich but impoverished African country peaked at $14.48 billion in the middle of the year, accounting for more than 60% of GDP.
Under the administration of Edgar Lungu, who was deposed in August elections by veteran opposition leader Hakainde Hichilema, the country’s debt had soared.
After Zambia became the first African country to default on its debt during the coronavirus epidemic, Hichilema is in talks with the International Monetary Fund for a rescue.
Of the total debt, Zambia owes China $5.75 billion — or $6.18 billion including unpaid interest, Finance Minister Situmbeko Musokotwane told parliament.
“The stock of public and publicly guaranteed external debt at the end of the second quarter stood at $14.48 billion excluding interest arrears,” he said.
Lungu was accused of borrowing heavily to splash out on infrastructure projects during his six- year tenure.
Despite vast reserves of copper and other minerals, Zambia’s economy contracted in 2020 — the first recession sincew 1998 — and inflation remains in double digits.
Hichilema campaigned on a pledge to improve governance and restore an economy that over years of rapid growth transformed the nation into a middle-income country.
The government held talks with the IMF from September 27 to 1 October seeking a bailout to restructure its debt.
“Government is actively engaging the IMF for a fund programme aimed at providing an anchor to our debt restructuring,” the minister said.
