Spurred by low interest rates, high investment needs, limited progress raising additional domestic revenue and stretched systems for managing public finances, the debt ratios of DSSI countries have increased, partly reversing a decline seen in the early 2000s. The industry leader for online information for tax, accounting and finance professionals. The public debt definition used in this DSA covers the central government direct and guaranteed debt (including budget expenditure arrears) as well as the nonguaranteed external debt of a fiscally important state-owned enterprise (SOE) (Text Table 1). Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts. With more than $50 billion of external debt, about 47 percent with private sector creditors and bondholders, and 10 percent each with bilateral creditor China and Japan, Sri Lanka can benefit from the steps set out in the Common Framework to better manage its debt restructuring task. 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. We are confident that the Zambian government is well aware of this option and we would be surprised if they are not utilizing it, The Zambia China Friendship Association (ZCFA) said in a Statement by Dr. Fredrick Mutesa. Zambia: UN experts concerned over delay in the country's debt restructuring 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). Those of you who have the medium to discuss these issues please bring them out so that we correct the situation. And if the MOU is to be signed before the end of March, 2023 (first quarter), when the next review of Zambias IMF programme is due, then Zambia would need to immediately directly engage China at the highest level. 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. Debt restructuring is needed as Zambias debt has become unsustainable, causing the country to default on its external debt in 2020. 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. LONDON, April 21 (Reuters) - Zambia's debt restructuring process has "stalled" as it awaits the formation of a creditor committee, Finance Minister Situmbeko Musokotwane said on Thursday at. In order to put Chinese economic power in context. 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. However, the process has been painfully slow for Zambia, a fact that has discouraged all but a handful of other struggling governments from seeking help under the mechanism. Reuters, the news and media division of Thomson Reuters, is the worlds largest multimedia news provider, reaching billions of people worldwide every day. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers. And already, the delay is affecting the countrys currency. But, she said, low copper prices, weather-related economic shocks and delays in the debt restructuring all posed risks. Currently, countries fear being downgraded by credit rating agencies and losing capital market access if they take advantage of it. As part of the recalibration process, China could be asked to help Zambia with its fight against corruption and strategies to mitigate adverse effects of climate change. Fund staff is trying to facilitate that process so that technical issues can be resolved and negotiations can continue to progress," the spokesperson told Reuters. See here for a complete list of exchanges and delays. Zambian authorities on a new arrangement under the Extended Credit Facility I know that the Chinese have been a barrier to concluding the negotiations.. The second factor is that China is new to international debt restructuring, and so it has been on a learning curve, whereas the Paris Club of Official bilateral creditors has taken years to develop their debt relief processes. LONDON, Sept 15 (Reuters) - Zambia's international bondholders have criticised the International Monetary Fund's debt restructuring framework as "arbitrary" and for excluding the. Zambia agrees to debt restructuring plan | CGTN Africa 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. call by the Official Creditor Committee for private creditors and other 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. Debt coverage 1. Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts. Aporoval of the package is contingent on progress in debt restructuring negotiations with Sri Lankas creditors. Local currency debt for the median DSSI country doubled from 7 percent of gross domestic product in 2010 to 15 percent in 2021. In addition to the progress made so far, according to the IMF, Zambia and the OCC aim to sign a legally non-binding memorandum of understanding (MOU) by the end of 2022. Restructuring Zambia's debt burden has been a major priority for the UPND government since it came to power in August last year. [1/2]Zambia's Finance Minister Situmbeko Musokotwane attends the Annual Meetings of the International Monetary Fund and World Bank in Washington, U.S., October 15, 2022. An improved common framework for debt treatment could clear a path through an increasingly complex creditor landscape. Some Western officials accused China of dragging its feet in restructuring talks, something Beijing denied. Zambia will, therefore, have to bilaterally negotiate with China for any binding restructuring deal, rather than the one imposed by the Bretton Woods institutions and the Paris Club. non-confrontation and diplomatic approach in dealing with China. At the end of 2021, external . 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 . But the release of around $188 million - the loan's second disbursement - is subject to approval of the review by the IMF Executive Board. Zambian finance minister criticises creditor delays in debt restructuring External debt Restructuring Debt of Poorer Nations Requires More Efficient Coordination An improved common framework for debt treatment could clear a path through an increasingly complex creditor landscape. It is only the nave, who dont understand 21. He is also an Op-Ed Contributor to the Hong Kong based, South China Morning Post (SCMP) and Author of: China-West Battleground in Africa: Debt Ridden Zambia, which is available on Amazon.com (Contact:[emailprotected]). However, others sounded more cautious about the Common Framework as a tool to overhaul debt burdens. Zambia finance minister says IMF programme needed for orderly debt As well, the actual restructuring deal will be negotiated bilaterally with each official creditorsomething China has long insisted on. Zambia : Minister of Finance's Detailed Explanation on the Debt The Zambia China Friendship Association in a rare statement, expressed its concern about the USAs apparent meddling in Zambia China relationship. Zambia's Creditors Close to Debt Restructuring Deal, IMF Says Our programs and centers deliver in-depth, highly relevant issue briefs and reports that break new ground, shift opinions, and set agendas on public policy, with a focus on advancing debates by integrating foundational research and analysis with concrete policy solutions. The private sovereign debt accounts for nearly 45%. Reuters, the news and media division of Thomson Reuters, is the worlds largest multimedia news provider, reaching billions of people worldwide every day. All quotes delayed a minimum of 15 minutes. The agreement with official creditors means Zambia will be able to receive another $188 million tranche of money from the International Monetary Fund, part of a $1.3 billion package approved in September. The suggested meeting should be about the pursuit of common interests which can help Zambia solve its economic problems and accelerate its economic growth through better utilization of the huge Chinese market and Zambias huge agriculture and natural resource potential. I propose giving one of the northern provinces to China, maybe our all weather friend will forget about the Kaloba. The time for depending on the West for this deal to is long gone. 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. Nominal haircut is something China has avoided in its previous bilateral debt restructuring agreements with debtor countries. "Zambia has reached an agreement on a debt treatment with our official creditors a significant milestone in our journey towards economic recovery & growth," Zambian President Hakainde Hichilema wrote on Twitter. Zambia on track for debt restructuring next quarter -finance minister Zambia Debt Relief Pledge Clears Way for $1.4 Billion Programme, Says IMF PARIS, June 23 (Reuters) - Zambia has struck a deal to restructure $6.3 billion in debt owed to governments abroad including China, in a breakthrough for indebted nations around the world that . The China Development Bank has a balance sheet of more than US$2.4 trillion as at the end of 2017. In March 2023, the IMF Executive Board approved a 48-month EFF of approximately US$3 billion to support the government's reform program. There is no question. Both the US Secretary of Treasury and the World Bank President have blamed China for the delay in the talks. With elevated risks to sovereign debt, a global cooperative approach is necessary to reach an orderly resolution of debt problems and prevent defaults. The board will consider the review "once the necessary financing assurances have been received," Allison Holland, IMF Mission Chief for Zambia, said in the statement. 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. Zambia debt restructuring 'stalled' - finance minister Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology. China under President Xi Jinping, is now a more assertive and coercive country. But once China supports IMF programme, the IMF package will be used to pay western creditors we owe money. Our Standards: The Thomson Reuters Trust Principles. IMF: Zambia to seek $8.4-billion debt relief for 2022 to 2025 - RAPPLER Zambia: A template for debt restructuring? Zambia has to lobby China to drop these impossible demands. 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. It demands respect commensurate with its economic, diplomatic, political, technological and military power in international affairs. Did you and your PF ever think that one day the country will have to pay for the fast loans? U.S cannot compete with the aforementioned numbers. The deal has been delayed, and the target of 2022 year end for the signing of the non-legally binding Memorandum of Understanding (MOU) between Zambia and the Official Creditor Committee (OCC) members, has been missed. China, for example, is Australias biggest trading Partner. IMF Members' Quotas and Voting Power, and Board of Governors, IMF Regional Office for Asia and the Pacific, IMF Capacity Development Office in Thailand (CDOT), IMF Regional Office in Central America, Panama, and the Dominican Republic, High-Level Summary Technical Assistance Reports, Financial Sector Assessment Program (FSAP), Currency Composition of Official Foreign Exchange Reserves. The industry leader for online information for tax, accounting and finance professionals. The portfolio of lenders according to the Ministry of finance include the following: official bilateral creditors (15 percent), multilateral (11.5 percent), Eurobond investors (11.7 percent), non-bonded commercial lenders (11.4 percent) and Chinese commercial and state-owned lenders (about 30%). In August, Zambia won International Monetary Fund (IMF) approval for $1.3 billion, three-year loan programme to help it restructure debts which the government said stood at $14.87 billion at the . 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. As for the nature of the deal, what has clearly come out from observing the restructuring talks from a distance, is that, the deal that is likely to emerge is not what the IMF, World Bank and the Parish Club originally envisaged, nor what Zambia and the public expected. Putting in place mechanisms that ensure coordination and confidence among creditors and debtors has become urgent. See here for a complete list of exchanges and delays. The views expressed are those of the author(s) and do not necessarily represent the views of the IMF and its Executive Board. 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 is a sovereign state which does not need another government to speak for it, particularly where China is concerned. Spending has remained within budget limits and, importantly, social spending has increased in line with government targets," Holland said. You economist need to pin point exactly where the problem is and not start yap yapping on theoriesif there are people or institutions hoarding USD so that they benefit when the exchange rate is very high tell us who they are as they are destroying the economy. At the end of its first review of this programme on 6 April. Zambia has to lobby China to drop these impossible demands. 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. IMF approval came after official bilateral creditors to Zambia pledged, as requested by the IMF, to negotiate a debt restructuring deal with Zambia. 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. Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile. "The Chinese are asking (for) a number of clarifications, which us and the IMF are providing them," Musokotwane said. . June 22, 2023. Tighten your belts, we are on flight HH 2023. 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. Amid depleted reserves, Sri Lanka announced an external debt service suspension in April 2022, pending debt restructuring. The delivery of these financing assurances will enable the IMF Executive See here for a complete list of exchanges and delays. with its commitment to negotiate debt restructuring terms, accordingly, For those DSSI countries with market access, the share more than tripled from 8 percent to 28 percent in 2021. These numbers gives China huge leverage on most countries in their decision making process and creates a certain level of dependence due to the volumes that China generates. Anyway I leave it to the people who know and live my humble life. Zambia is in debt distress and urgently needs deep and comprehensive debt treatment in line with the Joint WB-IMF Debt Sustainability Analysis (DSA) that called for $8.4 billion in debt relief in 2022-2025 and additional relief through 2031. 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