ZAMBIA’s cabinet approved plans to restructure the country’s loans from China after the International Monetary Fund said Africa’s second-biggest copper producer was at high risk of debt distress.
The government will also source financing directly from Chinese lenders rather than through contractors in a bid to cut the cost of borrowing, the presidency said Tuesday in an emailed statement.
Zambia’s external debt grew to $7.6 billion, or 29 percent of gross domestic product, by the end of August, according to Finance Ministry data, a situation that prompted a warning in October from the IMF.
While $3 billion has been raised in Eurobonds since 2012, the bulk of the new foreign debt is from Chinese state-owned companies and has gone to building roads, airports and power plants. The government has earmarked more than 10 percent of its 2018 spending to go toward servicing foreign loans.