The Center for Trade, Policy and Development (CTPD) has recommend that the Zambian delegation at the Forum on China-Africa Cooperation (FOCAC) prioritizes renegotiating Chinese debt.

The center says Zambia is at high risk of debt distress, and the Chinese government has time and again signaled that China might be open to supporting the Zambian Government to restructure its debt portfolio.

CTPD Executive Director Isaac Mwaipopo says Zambia must therefore take advantage of this platform and bring to the table a conversation around the need to renegotiate its Chinese debt.

Mr. Mwaipopo says Zambia should avoid at all costs acquiring more debt during this summit.

He says transparency and accountability in loan acquisitions, the terms and structure of Chinese loans to Zambia – and details about how they are secured – must be transparent.

“Not only will this help to allay market concerns on the basis that investors should be provided with the key commercial terms of Zambia’s debt portfolio (thus reducing uncertainty), but it will permit greater oversight of the projects the government is promoting and will improve value for money,” he said.

Mr. Mwaipopo says the center remains deeply concerned about the growing negative publicity of Zambia which has now penetrated the international media space, there is need to come together as a country and find common ground that can help to resolve the current situation.

He notes that as the 2019 budget debates draw closer, there is serious need to put heads together in finding lasting solutions as the current debt situation might get severe.

“It is our sincere hope that the departure of the IMF representative to Zambia will not affect prospects for accessing the desperately needed support from the international monitory Fund as the failure to access that support could have severe implications for the country,” he said.

The scale of this Chinese lending is significant: speaking in October 2017, the then Chinese ambassador to Zambia said that over 600 Chinese enterprises are investing in Zambia and the total Chinese investment is close to US$4 billion, making Zambia one of the top ten destinations in Africa for Chinese investment.

95% of all of Zambia’s external debt from export and suppliers’ credit sources comes from China, with debt from Chinese sources equaling approximately US$3 billion (or 30% of Zambia’s total external debt stock) in 2017.