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Hichilema and Akufo-Addo revive hopes of debt deal

Closely watched by other indebted African states, Zambia has reached an agreement with a group of private creditors to restructure its international bonds

President Hakainde Hichilema's government appears to have taken a big step forward towards a major debt agreement after reaching a deal on Monday with a group of private creditors to restructure US$3 billion of its international bonds.

The proposal is similar to the restructuring offer which was rejected by official creditors, including France and China, last year, but involves bondholders taking a $840 million haircut instead of $700m.

An IMF spokesperson reported that the 'agreement is consistent with the parameters of the IMF program.'

The outcome of Zambia's talks, three years after it defaulted on its debt, is being closely watched by other heavily indebted African states and is a test of the G20's Common Framework platform, established during the Covid-19 pandemic to bring together big creditors like China and the traditional group of developed creditor nations, known as the Paris Club, to restructure debts for states in debt distress.

Fellow defaulter, Ghana is also seeking a deal under the initiative, which has been criticised for its slow pace.

Ahead of the proposal being agreed, Information and Media Permanent Secretary Thabo Steven Kawana said that after the debt restructuring is concluded, Hichilema's government would focus on driving investment to its mining sectors including cobalt reserves, which ministers are touting as a route back to economic growth.

'Give us a bit of headroom,' he said. 'If that is achieved, then you will begin to see how all the plans we have to grow our economy will be rolled out.'

'We are at the point where the whole world is watching to see how Zambia will come out of this,' Kawana said.

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