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Zambia’s default recovery can weather the storm of opaque Chinese debts, analysts say

By David Whitehouse
Posted on Friday, 1 October 2021 16:23

Zambia may have borrowed more from China than previously thought under former President Edgar Lungu. REUTERS/Jason Lee

A new report, which suggests Zambia’s debts to China are much higher than previously disclosed, is unlikely to unwind the rally in the country’s eurobonds since the election of Hakainde Hichilema as president in August, analysts say.

The report from the Johns Hopkins China Africa Research Initiative (CARI) estimates that total Chinese public and publicly guaranteed debt at the end of August stood at $6.6bn, nearly double the officially disclosed amount of $3.4bn. CARI estimates that at the end of 2019, Zambia’s loan commitments to all Chinese creditors were at about 4% of gross national income, versus an African average of 10%.

Zambia defaulted on its eurobonds in November 2019, but Hichilema’s election victory in August this year has prompted a rally in the country’s traded debt.