The agreement was reached at a summit in Paris and calls for Zambia’s debt to be rescheduled over more than twenty years with a three-year grace period during which only payments on interest are due.
This includes 1.3 billion Dollars in arrears, and private sector creditors are expected to do the same on 6.8 billion Dollars owed to them. The deal is seen as a breakthrough for indebted nations around the world that have faced lengthy negotiations with their creditors. It also marks the first African country to default on its sovereign debt during COVID and is viewed as a test case for a debt restructuring framework backed by the group of twenty wealthy nations.
The agreement with official creditors also means Zambia will be able to receive another 188 million Dollars tranche of money from the international monetary fund, part of a 1.3 billion Dollar package approved in September.
