• Zambia’s debt has accumulated to unsustainable levels.
• There is need to have it restructured with the help of IMF, within the G20 Common Framework and Paris Club.
• China is not a member of the Paris Club.
Centre for Trade Policy and Development (CTPD) has advised President Hakainde Hichilema to continue engaging his Chinese counterpart Xi Jinping over Zambia’s debt restructuring process.
Speaking in an interview with Money FM News, Centre Head of Research Boyd Muleya said the recent telephone conversation between President Hichilema and President Jinping was important and this is what government should be getting into, going forward.
Mr. Muleya stated that Zambia’s debt has accumulated to unsustainable levels, hence the need to have it restructured with the help of International Monetary Fund (IMF), within the G20 Common Framework and Paris Club.
He however noted that China does not have a voice in terms of being part of the debt restructuring agenda because it is not a member of the Paris Club.
Mr. Muleya said this is why Zambia had challenges around China not being part of the debt restructuring process of their over US$5 billion.
“What we see in that conversation is a very important aspect that ignites the relationship between the people of Zambia and the people of the Republic of China.”
“If we are having President Hakainde Hichilema talk to his Chinese counterpart President XI Jinping, I think it is very important that such conversations can even be extended. It’s an opportunity for President Hichilema to make an appeal, which I’m sure he did just to ensure that China does help us,” Mr. Muleya said.
Mr. Muleya further advised government to position itself to enhance bilateral relationships with China which are expected to yield results in terms of brining in Foreign Direct Investments (FDIs).
He said Zambia’s relationship with China and other African nations has been that China is supporting a lot of infrastructural projects in Africa and that has been the path through which most of its debt has been contracted.
“It will be a very interesting conversation to see what sort of relationship the New Dawn Government will have with China, in respect of contracting debt based on infrastructure projects or China will be expected to change its economic performance around infrastructure and focus on something else such as support towards the agriculture sector is expected to grow and so much potential in that space rather than roads and other infrastructure projects.”
In a telephone conversation with President Hakainde Hichilema last week, President of the People’s Republic of China President Xi Jinping said he was eager to address Zambia’s debt issue, further expressing commitment to working together within the G20 Common Framework in order to resolve it