The U.S. Treasury Department’s top international official, Jay Shambaugh, held discussions with Zambia’s Finance Minister Situmbeko Musokotwane on Wednesday. The conversation addressed two critical issues: Zambia’s ongoing debt restructuring efforts and its response to a severe cholera outbreak.
Zambia, grappling with a cholera outbreak that has claimed 333 lives and resulted in over 8,000 cumulative cases since October, received assurances from Shambaugh about the U.S. government’s commitment to partnering with Zambia to curb the outbreak.
In addition to the health crisis, Zambia, as one of Africa’s largest copper producers, has been contending with debt issues. Defaulting on its debts three years ago amid the COVID-19 pandemic, the country has faced delays in its restructuring efforts.
Shambaugh acknowledged Zambia’s performance under its International Monetary Fund (IMF) program and encouraged sustained progress in economic reforms. However, the country faced a setback in November when its official creditors, including China and members of the Paris Club, rejected a preliminary restructuring deal.
The IMF responded in December by approving a $187 million immediate loan payout to Zambia, emphasizing the need to revise a $3 billion restructuring proposal for bonds that were initially rejected by official creditors in November.
The ongoing debt restructuring discussions, conducted under the G20’s Common Framework established in 2020 in response to the COVID-19 pandemic, were a focal point of the conversation. Debtor countries, including Zambia, aim to reach comparable restructuring deals with official and commercial creditors through this framework.
Zambia has expressed its intent to finalize negotiations with all remaining creditors and achieve key conditions for debt relief by the first quarter of 2024, as revealed earlier this month. The outcome of these discussions will significantly impact Zambia’s economic trajectory and response to both its health crisis and debt challenges.