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CHINA SUSPENDS US$110M DEBT

By AARON CHIYANZO
THE payment of all interest and principal on sovereign loans from the Export Import Bank of China (“Exim China”) amounting to US$110 million will be suspended, the Ministry of Finance has said.

Secretary to the Treasury, Fredson Yamba said the suspension of loans which were due between May 1 and December 31 2020, would be within the framework of the G20 Debt Service Suspension Initiative (DSSI).
Mr Yamba said the move was aimed at helping Zambia ease the debt and liquidity pressures as the country mobilizes the necessary resources to fight the Covid-19 pandemic.
“Reaching this agreement is an important milestone for Zambia as it undertakes steps to ensure broad based debt relief and equal treatment of creditors in its debt relief efforts,” he said in a statement.
Mr Yamba thanked authorities in China for the debt service suspension and for the friendly relations that exist between the two countries.
He said this was the second creditor from China to provide relief to the country following a similar gesture by the China Development Bank.
“While this this is bilateral debt, we will continue to engage private Chinese lenders based on friendly consultations.
“As earlier indicated Government will be transparent in the process of debt relief and will continue to work with all our creditors to reach similar interim agreements around the deferral of both principal and interest payments,” said Mr Yamba.
He said such interim debt service deferment agreements would also provide the Government with the necessary time to complete its overall debt strategy aimed at restoring public debt sustainability.

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