LUSAKA — Zambia will not be paying its $750 million euro bond due in September until new terms of payment are agreed between the government and bondholders, its Finance Minister Situmbeko Musokotwane said on Sunday.
The International Monetary Fund (IMF) on Thursday approved a $1.3 billion, 38-month loan program, a step taken after its main creditors China and France agreed in July to negotiate to restructure the southern African country’s debt.
“The bonds fall due (but) we will not pay on this basis. Let’s talk. Let’s agree on new terms before we can start servicing,” Musokotwane told local news channel ZNBC in an interview.
The negotiations with private creditors are likely to be tough but Zambia has the support of the international community, the minister said.
Zambia became the first African country to default in the pandemic era in 2020, struggling with debt that reached 120% of its gross domestic product.
Besides the $750 million euro bond, Zambia has a $1 billion euro bond due in 2024 and another $1.25 billion euro bond due for repayment in 2027.
Musokotwane said the government had agreed with the IMF to put in place measures to ensure Zambia will not fall back into unsustainable debt. (Reporting by Chris Mfula; Writing by Promit Mukherjee; Editing by Andrew Cawthorne)