Zambia’s Treasury Secretary, Felix Nkulukusa, said on Monday (27 October) that a third party, which he chose not to identify, has expressed interest in taking over the country’s debt with the African Export-Import Bank (Afreximbank), offering a potential way to overcome an obstacle that has kept the country in default.
A dispute over whether Zambia should restructure its Afreximbank debts has complicated — and prolonged — the painful exit from default, Reuters reports.
Nkulukusa stated that Afreximbank communicated its intention to take the country to arbitration over the debts but has not yet proceeded with the process.
“There is another avenue that has emerged, in which one of the third parties has expressed interest in assuming this debt,” Nkulukusa told reporters.
Zambia owes about $45 million to Afreximbank, according to the research institute ODI. The country has “no objection” to transferring the debt to a third party.
The secretary explained that the bank made contact in August, and in September, Zambian authorities responded, indicating they had no objection to assigning the debt to a third party.
“We will owe that third party, and therefore all we need is an assignment instrument” before the debt can be restructured “in line with comparable treatment under the Official Creditors Committee,” he explained.
Afreximbank insists it is a multilateral creditor with “preferred creditor status,” which protects it from losses in debt restructuring processes.
However, sources previously stated that the Paris Club of official creditors made it clear to Zambia and Ghana that they must restructure their debts to Afreximbank and the Trade and Development Bank of Eastern and Southern Africa (TDB) on terms comparable to those applied to other creditors.
Source: Diário Económico
