THE Export and Import Bank of China has suspended, within the framework of the G20 Debt Service Suspension Initiative (DSSI), the payment of all interest and principal on sovereign loans amounting to US $110 million due between May 1 and December 31.
Secretary to the Treasury Fredson K. Yamba announced in a statement that the move was aimed at helping Zambia ease the debt and liquidity pressures as the country mobilises the necessary resources to fight the COVID-19 pandemic.
Yamba said reaching this agreement was 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.
“Government is thankful to the Authorities in China for this debt service suspension and for the friendly relations that exist between the two countries. This is the second creditor from China to provide relief to the country following a similar gesture by the China Development Bank. While this is bilateral debt, we will continue to engage private Chinese lenders based on friendly consultations,” he stated.
“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. Such interim debt service deferment agreements will also provide the government with the necessary time to complete its overall debt strategy aimed at restoring public debt sustainability.”