Lusaka – Zambia’s newly elected government on Thursday said it owed $2 billion more to foreign creditors than previously thought, with more than $6 billion owed to China alone.
The resource-rich but impoverished African nation said external debt stood at $14.48 billion at the middle of the year – more than 60% of gross domestic product.
Debt had ballooned under the government of Edgar Lungu, who was toppled in August elections by veteran opposition leader Hakainde Hichilema.
Hichilema is in talks for a bailout from the International Monetary Fund after Zambia became the first African nation to default on its debt during the coronavirus epidemic.
Of the total debt, Zambia owes China $5.75 billion – or $6.18 billion including unpaid interest, Finance Minister Situmbeko Musokotwane told parliament.
“The stock of public and publicly guaranteed external debt at the end of the second quarter stood at $14.48 billion excluding interest arrears,” he said.
Lungu was accused of borrowing heavily to splash out on infrastructure projects during his six- year tenure.
Despite vast reserves of copper and other minerals, Zambia’s economy contracted in 2020 – the first recession sincew 1998 – and inflation remains in double digits.
Hichilema campaigned on a pledge to improve governance and restore an economy that over years of rapid growth transformed the nation into a middle-income country.
The government held talks with the IMF from September 27 to 1 October seeking a bailout to restructure its debt.
“Government is actively engaging the IMF for a fund programme aimed at providing an anchor to our debt restructuring,” the minister said.
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