(Reuters) – China has committed to joining Zambia’s creditor committee, International Monetary Fund managing director Kristalina Georgieva said on Thursday, amid complaints from Zambia’s finance minister about delays to its debt restructuring.
People’s Bank of China governor Yi Gang said that China intended to co-chair the committee, two sources with knowledge of the International Monetary and Finance Committee meeting told Reuters.
Zambia became the first pandemic-era default in 2020 and is buckling under a debt burden of almost $32 billion, around 120% of GDP.
“We were very pleased to hear from Governor Yi Gang… a very specific commitment to join the creditor committee on Zambia and work expeditiously for debt resolution,” said Georgieva at the International Monetary Fund (IMF) Spring Meetings.
She added that he had also committed to the Common Framework debt restructuring process, launched by the Group of 20 (G20) leading economies in 2020 in response to the pandemic.
Zambia’s finance minister Situmbeko Musokotwane said at public events on Thursday that the debt restructuring process had “stalled” and that the Zambian team had “come here to complain”.
An IMF spokesperson said that they did not have any more details of Yi’s statement, noting that it was at a closed door meeting.
“This augurs well, for coordination, in resolving debt for various African countries,” Zimbabwe’s finance minister Mthuli Ncube tweeted of the Chinese position.
At the International Monetary and Financial Committee, the Governor from China, announced that China will now join creditors for Zambia, in order to resolve that country’s debt situation. This augurs well, for coordination, in resolving debt for various African countries pic.twitter.com/7lrNqknqkV— Prof. Mthuli Ncube (@MthuliNcube) April 21, 2022
Ethiopia and Chad also signed up to the Common Framework more than a year ago and have yet to receive debt relief.
“China is a very significant lender to many of these low-income countries, and China needs to participate, along with the Paris Club and private creditors,” U.S. Treasury Secretary Janet Yellen said at a press conference before Georgieva’s.
“I’ve called on China to specifically for example participate right away in a meeting for Zambia, that wishes to undergo debt restructuring. And I am hopeful that China will agree to play a more constructive role.”
China and Chinese entities held $5.78 billion of Zambia’s debt at the end of 2021, according to the most recent Zambian government data.