State House: Debt Deal Almost Finalised

State House: Debt Deal Almost Finalised

By Masauso Mkwayaya

State House says Zambia’s debt restructuring is virtually complete, with only final procedural and legal formalities remaining to conclude what has already been agreed upon with creditors.

Economic Advisor to the President, PAMELA NAKAMBA, says 94 percent of the external debt subject to treatment has been either fully restructured or agreed to in principle, marking a significant national milestone.

Dr. NAKAMBA explains that this level of completion underscores Zambia’s credibility and consistency in implementing economic reforms, and reflects strong confidence from its international partners.

She notes the debt restructuring process progresses through critical stages, beginning with Agreement in Principle, which sets the main restructuring terms including repayment periods, interest rates, and relief measures.

According to a statement to ZNBC News, Dr. NAKAMBA says this stage represents a substantive commitment pending final legal documentation.

She adds that the last stage is full restructuring, where legal documents are signed, terms take effect, and Zambia begins servicing the debt under the new structure.

Dr. NAKAMBA has described Zambia’s debt restructuring journey as one of the most complex in the country’s economic history, involving diverse global stakeholders under a new mechanism known as the G20 Common Framework for debt treatment.

She says the Framework categorizes creditors into three groups: Official Bilateral Creditors, Bond Holders, and Private Commercial Lenders, each carrying distinct legal and financial implications.

Dr. NAKAMBA says Zambia’s Official Creditors, owed 6.3 billion U.S dollars, reached an Agreement in Principle in June 2023 through the Official Creditor Committee.

For Bond Holders, who are owed 3.5 billion U.S dollars, the Agreement in Principle was concluded in March 2024, with the debt fully restructured in June 2024.

She adds that this phase led to the issuance of new bonds and even saw Zambia’s credit ratings upgraded.

Regarding Private Commercial Lenders including banks, contractors, and suppliers, owed 3.7 billion U.S dollars, Dr. NAKAMBA says several agreements in principle have already been secured, and the legal finalization process is ongoing.

And Dr. NAKAMBA says the Presidency has taken note of public discussions suggesting inconsistencies in the Government’s communication on the restructuring.

She clarifies that there is no contradiction, but rather a misunderstanding by some sections of the public on what each stage of the restructuring process entails.