JOHANNESBURG (Reuters) – Zambia’s public sector debt rose 18% to $31.74 billion by the end of 2021 from end-June, a finance ministry document published on Wednesday showed, at a time when the country is negotiating to restructure its crippling debt.
Foreign currency debt accounts for 54% of Zambia’s borrowing, rising 2% in the second half of 2021 to $17.27 billion. Local currency debt jumped 43% to $14.47 billion.
In 2020, Zambia became the first country to have defaulted in the pandemic-era, buckling under a debt burden of more than 120% of GDP.
It reached a staff-level agreement with the International Monetary Fund (IMF) in December 2021 on a $1.4bn three-year extended credit facility.
Finance minister Situmbeko Musokotwane told Reuters in February that he hoped to get a formal IMF agreement signed off in May, but the timeline was deemed ambitious by analysts as the group of Paris Club creditors and China have yet to form a creditor committee.
President Haikainde Hichilema pledged to deal with the “unsustainable” debt burden when sworn in as Zambia’s new leader in August 2021.
(Reporting by Rachel Savage; Additional reporting by Karin Strohecker; Editing by Emma Rumney and Vinay Dwivedi)
