Debt Default Deadline Looms

Zambia faces the prospect of a sovereign debt default this week. 

The looming default comes as a result of a missed payment worth $42.5 million on one of the Eurobonds in October. The subsequent 30-day grace period comes to end on Friday. 

The government owes $3bn in Eurobonds alone and has asked bondholders for a relief period on interest payments until April 2021. In September it asked creditors for a deferral of $120 million for six months while it figures out a debt restructuring strategy. 

However, bondholders are yet to agree to such a request with discussions ongoing and a vote expected on November 13th. 

In an attempt to stave off default the Minister of Finance Bwalya Ng’andu has said he is doing everything in his power and has shared information on Chinese debts with bondholders following accusations regarding a lack of transparency. 

In October bondholders demanded answers over an apparent ‘ghost loan’ of over half a billion US dollars taken out by the PF government between December 2019 and January 2020.