Zambia has requested up to $8.4 billion in debt relief, the IMF announced in a statement on Tuesday. The country and lender finalized a deal last week to unlock a $1.3 billion bailout, contingent on a restructuring of external debt.
Zambia became Africa’s first pandemic-era default in 2020, and its external debt stood at $17.3 billion at the end of 2021, including $6 billion to China, according to the Zambian Ministry of Finance. After news of the restructuring broke, Zambia’s eurobonds due in 2024 and 2027 fell around 6.5% to a hair over 55 cents on the dollar, according to Bloomberg data.
Zambia will be the first country to pursue debt restructuring under the Common Framework for Debt Treatment, a mechanism for low income countries to seek debt restructuring introduced by the G20 in 2020. Chad and Ethiopia have since announced intentions to use the framework for their own debt restructurings.