Zambia’s debt to Chinese public and private lenders is $6.6 billion, almost double the amount disclosed by the previous Zambian government, the China Africa Research Initiative (CARI) has estimated from an analysis of loan data.
Copper-rich Zambia became Africa’s first coronavirus-era sovereign default last November and its ongoing debt restructuring has become a test case of Western multilateral efforts to get countries to disclose their full borrowings.
The previous government, led by Edgar Lungu, said Zambia’s Chinese debts stood at $3.4 billion. But the estimate published by CARI on Tuesday chimes with comments from President Hakainde Hichilema, who took office last month, that the debt load is likely to be higher.
The finance ministry said its official figures were “broadly consistent” with the CARI estimate, adding that the government’s reporting on public debt was accurate and transparent.
“Key creditors and stakeholders, including the International Monetary Fund and advisers to the bondholders’ ad hoc committee have received more detailed data on the makeup of the public debt under each category under non-disclosure agreements,” it added in a statement.
International creditors, with which the government is in talks, have complained that the lack of detail on Zambia’s China loans – which carry specific non-disclosure terms – has hindered the process of restructuring Zambia’s debts. read more
“Given the complicated situation … reaching consensus on burden-sharing is likely to prove exceptionally difficult,” CARI researchers Deborah Brautigam and Yinxuan Wang wrote.
The $6.6 billion figure is based on data collected by CARI at the Johns Hopkins University School of Advanced International Studies. It does not include penalties or interest arrears that continue to build up.
China is Africa’s largest creditor. It is part of the G20 Debt Service Suspension Initiative (DSSI), which is supported by the World Bank and the International Monetary Fund, and has suspended debt payments to dozens of the world’s poorest countries.
But Washington in particular has urged China to provide more data to other creditors about its loans, noting that some Chinese entities have not participated fully in the DSSI. read more
Tuesday’s study estimated that $7.77 billion in loans had been disbursed to Zambia and its state-owned enterprises by 18 major and minor Chinese banks or funds from 2000 to August 2021. Of those, Zambia has repaid at least $1.2 billion.
The estimate does not change Zambia’s total debt load of $14.3 billion, the researchers said, but shows that the Lungu government “was not transparent about the heavy weight of Chinese financiers among its many external creditors”.
Bwalya Ngandu, finance minister under Lungu, has said it is not true that Zambia’s debt numbers were understated. “We have never hidden any debt,” he said in a statement earlier this month. Asked about the new Chinese debt estimate, he did not immediately provide a response.
The researchers found six instances in which Chinese lenders had cancelled debt owed by Zambia, for a total of $392 million.
Zambia’s government debt ballooned out of control