zambia imf debt restructuringzambia imf debt restructuring

Zambia Seeks $8.4 Billion in Debt Relief Under IMF Bailout And already, the delay is affecting the countrys currency. China, for example, is Australias biggest trading Partner. 2023 Atlantic Council The situation differs significantly across countries, however. Spending has remained within budget limits and, importantly, social spending has increased in line with government targets," Holland said. On the domestic side, difficult trade-offs will exist between the need to restructure sovereign debt owed to domestic banks, in some cases, and the impact of such restructurings on financial sector stability and the capacity of domestic banks to finance growth. Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology. Typical PF behaviour, steal and hope for the best. Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology. official bilateral creditors to commit to comparable debt treatments. There is empirical evidence to support the assertion that Zambias relationship with the USA and China is not an either or situation. Zambia has reached a long-awaited $1.3 billion bailout deal with the International Monetary Fund, but negotiating the restructuring of a huge debt burden remains a daunting task ahead. And also some of the new investments that are coming from the U.S. and other places," he said. This China has lent the World USD2.2 trillion which is 14 per cent of its GDP. Putting in place mechanisms that ensure coordination and confidence among creditors and debtors has become urgent. It is very apparent from the available information that China has had its way in the Zambian restructuring talks with other OCC members. Zambia has to leverage its relations with the two economic powers in order to achieve synergy,Major Mubita Oliver Mubita wrote in his Masters of Military Art and Science degree thesis, for the Faculty of the US Army Command and General Staff College. By. Hung Tran is a nonresident senior fellow at the Atlantic Council, former executive managing director at the Institute of International Finance and former deputy director at the International Monetary Fund. IMF Managing Director Welcomes the Statement by the Creditor Committee support for the G20 Common Framework demonstrates that international It is, therefore, in the best interests of the Zambian restructuring deal, if the USA adopted a non-confrontation and diplomatic approach in dealing with China. The reality on the ground is that Zambias debt restructuring talks with creditors are very complex. Zambia is a sovereign state which does not need another government to speak for it, particularly where China is concerned. They are waiting for the good will of IMF which depends on China being good. The others were with the World Bank, Africa Development Bank, Banks in India, South Africa, the Arab World, Bank of China, Chinese Exim bank, Chinese development bank. Zambias economic recovery program is based on an IMF deal and the restructuring of the countrys $17.3 billion debt. It is in the interest of debtor countries as well as their creditors that debt restructurings, where necessary, are accomplished speedily, smoothly, and efficiently. Mathematician and author Hannah Fry investigates patterns in human behavior, AI and the creative ideas behind the organizations and pioneers transforming society. The scale of the debt relief Zambia requires has been a concern for some of its main creditors. The second strategy that should be used to ensure the restructuring deal is sped up, involves the United States of America. It demands respect commensurate with its economic, diplomatic, political, technological and military power in international affairs. Zambias economic relationship with both China and the U.S. is not zero-sum, as both countries make meaningful contributions to Zambias economic growth. China has lent the World USD2.2 trillion which is 14 per cent of its GDP. But once China supports IMF programme, the IMF package will be used to pay western creditors we owe money. Zambia expects to agree on a debt restructuring plan with creditors around the middle of next year after reaching a preliminary understanding for a program with the International Monetary Fund (IMF), Finance Minister Situmbeko Musokotwane said on Thursday. Rachel Savage is Africa Senior Markets Correspondent at Reuters, where she covers finance and economics across Sub-Saharan Africa, from sovereign debt crises and IMF programs to foreign exchange markets and cryptocurrencies. China under President Xi Jinping, is now a more assertive and coercive country. Zambia to pay less following debt restructuring deal - Musokotwane At the end of 2021, Chinese creditors accounted for almost $6 billion of Zambia's external debt, which was then $17.27 billion. Editing by Joe Bavier and Sandra Maler, Air strike on Sudan's Omdurman kills 22, health ministry says, South African rand firms as dollar weakens, stocks rise, Barrick CEO wants to search for more copper in Zambia and Congo, Zimbabwe police block opposition campaign launch, Israeli protests reignite as Netanyahu pushes new justice bill, Spain says cluster bombs should not be sent to Ukraine, Apartment building collapse kills 14 in Brazil, Russia seeks UN Security Council meeting on Nord Stream blasts. It had taken more than two years of talks for the approval of Zambia's debt restructuring plan, he pointed out. Official Creditor Committee for Zambia. I propose giving one of the northern provinces to China, maybe our all weather friend will forget about the Kaloba. The delay in the negotiations is mainly influenced by the stealth economic and diplomatic war that is going on between China and the West, which this Author wrote about two years ago. 'Chinese storm' looming over Europe's EV sector, Renault chairman warns, China's auto group retracts pledge to avoid 'abnormal pricing', Novavax to receive $350 million from Canada for unused COVID shots, TotalEnergies boss: 2024 U.S. election could cause energy shock, Shell warns of big drop in gas trading results, Airbus books record India orders, confirms higher deliveries, Tesla rolls out customer referral incentive globally as EV price war heats up, BP in talks over insurance deal for pension scheme, Financial Times reports, National Australia Bank to change home loan refinancing criteria. Sri Lanka: How to Strengthen Debt Management at the Time of Uncertainty Our Standards: The Thomson Reuters Trust Principles. MENASource offers the latest news from across the Middle East, combined with commentary by contributors, interviews with emerging players, multi-media content, and independent analysis from fellows and staff. It is only the nave, who dont understand 21st Century geo-politics, who can think that Chinas current behaviour at the OCC restructuring talks is not influenced by Zambias perceived change of foreign policy. Zambia's previous government put KCM into liquidation in 2019, triggering a legal dispute with its parent company, Vedanta Resources, that is now being settled out of court. Zambias debt restructuring negotiations have challenged the Chinese lending model. The announcement made on June 23, 2023, comes nearly three years after the country selectively defaulted on its debt repayments in late 2020. Zambia reached a staff-level agreement with the IMF on a $1.4 billion three year extended credit facility in December, conditional upon its ability to reduce debt to levels the Fund deems sustainable. Credit: (Photo: IMF Photo/Esther Ruth Mbabazi). On August 31, 2022, Zambia won approval by the International Monetary Fund (IMF) Board for a $1.3 billion assistance package. IMF: Zambia to seek $8.4-billion debt relief for 2022 to 2025 - RAPPLER In terms of its financial muscle, Chinas two major policy banks: China Development Bank (CDB) and the China Exim Bank (China Exim) are among the major development finance institutions in the world, and have made China become the largest source of official development finance in the World. Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology. Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts. The progress so far suggests that the OCC has found a compromise which is acceptable to Chinawhich until now has insisted on bilateral negotiations with debtor countries instead of participating in multilateral restructuring efforts. As well, the actual restructuring deal will be negotiated bilaterally with each official creditorsomething China has long insisted on. The expectation was a deal on similar lines like the 2000s Highly Indebted Poor Countries (HIPC) and the Multilateral Debt Relief (MDR) programmes from which Zambia benefited. The latest: The IMF just released a statement saying that for Zambia to access its next installment of IMF program funds, it "needs official creditors to move forward and reach agreement on a debt treatment in line with the financing assurances they provided in July 2022." LUSAKA, April 25 (Reuters) - Zambian President Hakainde Hichilema thanked China on Monday for joining international efforts to help his country to restructure its debt after China committed to. Their rivalry is on public display, which is not beneficial to Zambia at all. The visit will remove the current wrong perception that Zambia has abandoned our forefathers tried and tested foreign policy of non-alignment. "The Chinese are asking (for) a number of clarifications, which us and the IMF are providing them," Musokotwane said. Firstly, the Common Framework is only open to 73 low-income countries. We dont have to choose between the USA or China. Over the same period, the share owed to China rose from 2 percent to 18 percent and the share of Eurobonds sold to private creditors increased from 3 percent to 11 percent. Musokotwane also said he hoped to make an announcement by the first quarter of next year about potential new investors in Konkola Copper Mines (KCM) and Mopani Copper Mines (MCM). Among the 41 DSSI countries at high risk of or in debt distress, Chad, Ethiopia, Somalia (under the HIPC framework) and Zambia have already requested a debt treatment. China has always insisted on bilateral negotiations with debtor countries instead of participating in multilateral restructuring efforts. The current talks will not result in any binding agreement, The process that has been agreed upon in principle, is that Zambia and the Official Creditor Committee (OCC) will sign a legally non-binding Memorandum of Understanding (MOU), which will set out the key parameters of Zambias debt restructuring terms. All quotes delayed a minimum of 15 minutes. Under the CF, an Official Creditor Committee for Zambia was formed, co-chaired by China and France. The economic recovery and the Presidency of HH largely depend on its success. Creditor Committee for Zambias envisaged IMF-supported program, together The debt earmarked for restructuring includes $1.3 billion in arrears, and private sector creditors are expected to do the same on the $6.8 billion owed to them, according to a French official who asked not to be identified. They do not receive the IMF and World Bank Debt Sustainability Analysis, which is the basis for restructuring negotiations in the OCC until it is too late to contribute to the assessment. The time for depending on the West for this deal to is long gone. China under President Xi Jinping, is now a more assertive and coercive country. Currently, countries fear being downgraded by credit rating agencies and losing capital market access if they take advantage of it. The industry leader for online information for tax, accounting and finance professionals. At the end of its first review of this programme on 6 April. China is now an economic super power, who cannot easily be bullied and pushed around. Tighten your belts, we are on flight HH 2023. And if the. At the intersection of economics, finance, and foreign policy, the GeoEconomics Center is a translation hub with the goal of helping shape a better global economic future. Zambias economic relationship with both China and the U.S. is not zero-sum, as both countries make meaningful contributions to Zambias economic growth. Zambia's IMF Staff-Level Deal a Key Step to Debt Restructuring. Therefore, getting the IMF Board. There is no question that Zambias debt restructuring talks are not going on as well as was expected. Please can you quote that promise from the UPND Manifesto which outlines the programme to be undertaken, please help us to understand sometimes we hear these things from the PF, why not from the HHs voters. Zambia seeks debt relief while in the throes of its August 2021 election campaign Zambia has a long, complex relationship with the International Monetary Fund (IMF). Therefore, the G20 should extend the Common Framework to middle-income emerging countries in debt distress. With elevated risks to sovereign debt, a global cooperative approach is necessary to reach an orderly resolution of debt problems and prevent defaults. China's Ministry of Foreign Affairs did not immediately respond to a request for comment. "We remain mobilised to ensure that other countries caught in a debt trap benefit from a multilateral response," Macron added on Twitter. And it is at its weakest in nearly a year as talks drag on, Its important for them to be focused on getting to an actual debt restructuring where the burden can be lightened for Zambia.. Zambias first Official Creditors Committee (OCC) meeting was in June, 2022 with China and France as Co-Chairs, but progress of the talks since then, has been very slow, and the end of year (2022) target for signing an MOU was missed. The expectation was a deal on similar lines like the 2000s Highly Indebted Poor Countries (HIPC) and the Multilateral Debt Relief (MDR) programmes from which Zambia benefited. Experience so far shows that greater clarity on restructuring steps, earlier engagement of official creditors with the debtor and with private creditors, a standstill in debt service payments during negotiations, and specifying the mechanics of comparability of treatment is still needed. There will be higher youth unemployment, increased poverty levels and a higher risk of political instability. China, for example, is Australias biggest trading Partner. You accept the use of cookies as per our, Scowcroft Center for Strategy and Security, Adrienne Arsht Rockefeller Foundation Resilience Center, Rafik Hariri Center & Middle East programs, agreement with the IMF for a $2.9 billion package, Policy on donor acceptance and disclosure. The agreement reached at a summit in Paris calls for Zambia's debt to be rescheduled over more than 20 years with a three-year grace period during which only payments on interest are due. Zambia's finance minister has criticised prolonged discussions over the country's debt restructuring, which have included a Chinese call for multilateral lenders such as the World Bank to be. During her recent visit to Zambia, the US Treasury Secretary Janet Yellen urged Zambias creditors to work quickly to restructure the countrys debts, and accused China of obstructing the deal. Exclusive news, data and analytics for financial market professionals, Reporting by Leigh Thomas and Elizabeth Pineau in Paris and Chris Mfula in Lusaka; Editing by Susan Fenton, Air strike on Sudan's Omdurman kills 22, health ministry says, South African rand firms as dollar weakens, stocks rise, Barrick CEO wants to search for more copper in Zambia and Congo, Zimbabwe police block opposition campaign launch, Israeli protests reignite as Netanyahu pushes new justice bill, Spain says cluster bombs should not be sent to Ukraine, Apartment building collapse kills 14 in Brazil, Russia seeks UN Security Council meeting on Nord Stream blasts. Middle-income countries also in debt distress, such as Sri Lanka, are excluded. The Zambian OCC pledged to negotiate with Zambia to restructure its public external debt. Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks. See here for a complete list of exchanges and delays. Zambia Seeks Rapid Deals With IMF and Commercial Creditors - Bloomberg The China Development Bank has a balance sheet of more than US$2.4 trillion as at the end of 2017. ZAMBIA made global news again recently when it met conditions for debt Zambia's external debt contains three parts. Zambia is viewed as a test case for a debt restructuring framework backed by the Group of 20 wealthy nations and intended to streamline relief for countries caught in a developing world debt crisis sparked in part by the pandemic. Zambia expects an International Monetary Fund (IMF) debt health check to be finalised this month, to strike a restructuring deal with creditors by April and get a formal agreement with the fund . In May 2023, the program was approved in Parliament by a large majority of votes. articles a month for anyone to read, even non-subscribers! There has been some disquiet in some Zambian circles about the apparent impression and perception that has been created, that Zambia has impliedly outsourced lobbying for the debt deal with China to USA and Institutions like IMF and World Bank. IMF Managing Director Welcomes Debt Treatment Agreement Reached by So far only a handful of countries have requested to use the common framework, which was launched in November 2020, underscoring the need for change to build confidence and encourage participation at a pivotal moment for heavily indebted low-income countries. The International Monetary Fund executive board will meet on July 12 to complete the first review of its $1.3 billion extended fund facility (EFF) programme for Zambia, according to people with . Among the key demands that China is making are the following: One, Beijing wants multilateral development banks like IMF and World Bank to take losses in the restructuring process ; two, China is requesting Zambias local currency debt held by foreigners to be included in the deal, but experts say reworking the local debt is not feasible. This would support global stability and prosperity, too. UkraineAlert is a comprehensive online publication that provides regular news and analysis on developments in Ukraines politics, economy, civil society, and culture. At the end of 2021, external . Both the US Secretary of Treasury and the World Bank President have blamed China for the delay in the talks. See here for a complete list of exchanges and delays. President Hichilema returns from TROIKA Summit, Ambassador Mukwita Criticizes Vice President Nalumango for Missing the Point on Mealie Meal Cost. Zambia's Finance Minister Situmbeko Musokotwane told Reuters China had sought clarification from the Zambian government and the IMF on their debt agreement, he said. An Economist says the pledge by Zambia's Creditors to negotiate a restructuring of the country's debt opens the way for International Monetary Fund (IMF) to approve the bailout deal at their next Board of Governors meeting. In order to put Chinese economic power in context, it is important to note that China has billions worth of trade and investment relationship with countries in Asia, Africa, South America and Europe. Zambia Debt Relief Pledge Clears Way for $1.4 Billion, IMF Says The consequences of whatever comes out of the Zambia restructuring talks, makes it bigger than just a single country deal. Zambia's Creditors Close to Debt Restructuring Deal, IMF Says At Paris summit, World Bank, IMF take steps to boost crisis financing Zambia in 2020 became the first African country to default on its sovereign debt during the COVID-19 pandemic and struggled since then in protracted discussions to agree a deal. In November 2020, Zambia was unable to make its payments on a $42.5 million Eurobond, becoming the first African country in the pandemic era to default on its debt. However, others sounded more cautious about the Common Framework as a tool to overhaul debt burdens. It accounts for 32 per cent of Australian exports which amounts to $153.2 billion; Japan with $296.9 billion; India with $77.7 billion, Brazil with $67.7 billion; German with $256.7 billion trade volume. Zambia's government said earlier this month that the Export-Import Bank of China (EximBank) was representing China on the bilateral 'official creditors committee'. The biggest contribution that the U.S. can make to the debt issues outside the country is to act on responsible monetary policies, cope with its own debt problem, and stop sabotaging other sovereign countries active efforts to solve their debt issues , The Embassy Statement said. Sign up to receive free e-mail notices when new series and/or country items are posted on the IMF website. In March 2023, the IMF Executive Board approved a 48-month EFF of approximately US$3 billion to support the government's reform program. Reuters, the news and media division of Thomson Reuters, is the worlds largest multimedia news provider, reaching billions of people worldwide every day. On August 31, 2022, Zambia won approval by the International Monetary Fund (IMF) Board for a $1.3 billion assistance package. The MOU will be legally non-binding, and the key parameters on NPV reduction and duration extension are consistent with many solutions containing various scenarios of interest rate cuts and maturity extensions that do not require a nominal reduction of the face value of the debt. All quotes delayed a minimum of 15 minutes. Zambian President thanks China for help in debt restructuring The Head of the World Bank, David Malpass, was in agreement with Janet Yellen. China is now an economic super power, who cannot easily be bullied and pushed around. Zambia debt relief pledge clears way for $1.4 billion program, says IMF The International Monetary Fund has announced that Zambia's creditors are close to agreeing a debt restructuring deal that would pave the way for the IMF to release $188 million to Zambia, the first stage of recovering from pandemic-era debt. While the debt earmarked for overhaul stood at $6.3 billion, the last IMF debt sustainability analysis states that Zambia owed $8 billion to bilateral creditors at the end of 2021. The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs. next three years to secure a $3bn loan deal from the IMF as a part of its debt . "We are hoping that by first quarter of next year we should be there with some of them. The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs. The IMF African Department's director, Abebe Aemro Selas The delay in the negotiations is mainly influenced by the stealth economic and diplomatic war that is going on between China and the West, which this Author wrote about two years ago. Explainer: What is China's position on restructuring debt In 2020, Zambia became the first African country in the pandemic era to default. Policymakers must strike the right balance in the face of high debt and rising inflation. Previously she was LGBT+ Correspondent at the Thomson Reuters Foundation for just over three years and was awarded Journal Israel's business hub Tel Aviv saw the biggest anti-government protest in weeks on Saturday against a renewed push by Prime Minister Benjamin Netanyahu's hard-right coalition to overhaul the justice system. LONDON/JOHANNESBURG, Dec 8 (Reuters) - The International Monetary Fund (IMF) on Thursday urged default-stricken Zambia to strike a debt restructuring deal with its international. We are slowly but surely getting to where PF left us after ten years of their misrule. Mr 70% is getting all worked up and uses the scattergun approach to no avail. In 2020, Zambia was the first African country to default in the COVID-19 era and it has struggled to finish restructuring external debt that reached $18.6 billion at the end of last year. The Zambia China Friendship Association in a rare statement, expressed its concern about the USAs apparent meddling in Zambia China relationship. The Zambian government needs to act now, by taking necessary steps that are required to consummate the deal. For example, there had been contention about how to classify debt owed to China Development Bank, as bilateral or private sector debt. Beijing was keen not to be seen further holding up debt relief for Zambia at the summit, the French official said, adding that French President Emmanuel Macron's talks with Chinese authorities in Beijing in April also helped unblock the situation. The overarching reason for the delay of the deal, is the geo-political and economic rivalry between the West and China, with China flexing its muscles to delay. Zambia, the first African nation to seek debt relief from Eurobond holders since the onset of the pandemic, aims to reach a restructuring deal with creditors by the end of a six-month interest . "That's why we are not in favour of a Common Framework - we were able to get traction with the most committed creditors.". Read More. China wants more clarity on the IMF assumptions on which the loan programme is based, he said, since these are meant to form the basis of the restructuring negotiations between Zambia and all its creditors.