China and the US have reached an agreement to assist Zambia in resolving its debt burden of over $14 billion. Chinese Ambassador to Zambia Du Xiaohui and his US counterpart, Michael Gonzales, met on Wednesday to discuss the issue and decided to cooperate.
Africa’s second-largest copper producer has been making efforts to restructure its economy since August 2020. According to government data, Chinese creditors account for $5.7 billion of the country’s external debt, with about $3.5 billion owed to bondholders.
In August 2022, the International Monetary Fund approved a $1.3 billion bailout package for the country as part of a broader restructuring program under the G20 framework. However, disagreements between the US and China have been blamed for the debt overhang.
“Both sides agreed on helping Zambia resolve its debt issue by cooperating rather than publicly blaming each other,” according to a statement issued by the Chinese envoy, which was cited by local media.
Zambian Finance Minister Situmbeko Musokotwane told Reuters that China and international bondholders were responsible for the delay in resolving the nation’s $14 billion external debt overhang. He said creditors were trying to minimize the amount of help they offer, despite wanting a resolution to the issue.
While Zambia’s relations with China and the US have been under scrutiny in recent months due to the two countries’ perceived competition for influence on the African continent, both nations reaffirmed their commitment to supporting a “strong and vibrant” Zambian economy following a consultation in Lusaka.
Washington and Beijing have pledged to support Zambian President Hakainde Hichilema, particularly in areas of mutual interest such as anti-corruption measures and strengthening the economy, according to the statement.
During a recent visit to Lusaka by US Vice President Kamala Harris, Hichelima said he was committed to working with both the US and China without conditions, and urged the world’s two largest economies to work together for the benefit of the least-developed countries.