Zambia’s External Debt Falls to US$15.35bn After Eurobond Buyback, says Musokotwane

Between the end of December 2025 and June of 2026, Zambia’s external debt has declined by five percent, from US$16.15 billion to US$15.35 billion.

Situmbeko Musokotwane, Minister of Finance and National Planning, addressed the National Assembly on Tuesday, attributing the decline to a liability management operation actioned in the first half of 2026 paired with a slowing of external debt disbursements. This was to support a buyback of Eurobond Bond B of approximately US$1.36 billion, which was originally scheduled to mature in 2053. Musokotwane explained that the bond carried conditions that could have increased debt servicing costs, and had potential to bring forward repayment obligations if certain economic and fiscal targets were achieved.

The government had generated an estimated savings of US$275 million through purchasing the bond below its original value. These saving which had been allocated for the Energy Grid Resilience Programme to strengthen the reliability and sustainability of the country's electricity network. Musokotwane said that the government will submit a special report to Parliament detailing how the transaction was financed, along with its impact on the country's debt position, and the total savings generated.

He disclosed that total central government debt stood at US$30.89 billion as of June 2026, comprised of US$15.54 billion in domestic debt and US$15.35 billion in external obligations.

Dr Musokotwane also said that a proposed follow-on programme with the International Monetary Fund (IMF) would provide US$1.46 billion in financing over 36 months, through the Fund’s Extended Credit Facility.

Financing will be allocated equally between balance-of-payments support and budget support.

He said that the “Government remains firmly committed to restoring and sustaining debt sustainability through prudent debt management, continued debt restructuring and sound fiscal policies”.