By Chris Mfula
LUSAKA (Reuters) -A date for the first meeting of Zambia’s official creditor committee has not yet been set, an official said on Monday, after the president of the debt-laden country was reported as saying it would take place on June 16.
“We are waiting for the Paris Club secretariat to give us that information,” Secretary to the Treasury Felix Nkulukusa told Reuters.
France, which hosts the Paris Club forum for international creditors, and China are co-chairs of the bilateral negotiations to restructure Zambia’s external debts, which stood at $17.27 billion at the end of 2021, according to government data.
The French finance ministry did not respond to a request for comment.
In 2020, Zambia became the first pandemic-era sovereign default and is buckling under a debt burden of more than 120% of gross domestic product (GDP).
It reached a staff-level deal on a $1.4 billion three-year extended credit facility with the IMF in December and needs to finish bilateral negotiations to secure the funding.
Last month, sources with knowledge of the process said China was holding up the debt relief discussions.
China said it was ready to support Zambia with its debts.
“Now we are at a stage where all the creditors have agreed to come to the discussion table,” presidential spokesman Anthony Bwalya said.
He said the meeting was likely to take place before the end of June.
Zambia’s government had previously repeatedly said it hoped the negotiations would be finished by that time.
This was “a tad optimistic”, JPMorgan analyst Sthembiso Nkalanga said in a note that cited President Hakainde Hichilema as saying the committee would hold its first meeting on June 16.
“We now see talks being concluded only in late 3Q/early 4Q at the earliest, with risks for longer delays,” Nkalanga said.
The head of a bondholder committee expressed frustration that the committee had not yet seen the IMF’s debt sustainability analysis, which forms the basis of negotiations.
“They’re not sharing vital information with a large creditor group and they need to do that,” said Kevin Daly of asset manager Abrdn, who is head of a committee representing some of the bondholders.
The IMF, in response, said the debt sustainability analysis is not typically shared with private creditors before it is approved by the IMF’s executive board. In Zambia’s case, it would be shared with the official creditor committee once it is formed, an IMF spokesperson said.
At the end of 2021, Zambia had $3 billion outstanding in Eurobonds, with $336 million of interest arrears, according to government data.
(Reporting by Chris Mfula, Additional Reporting by Leigh Thomas, Writing by Rachel Savage, Editing by William Maclean and Deepa Babington)
