Zambia is set to get a $100 million grant from the World Bank amid substantial delays in its debt restructuring efforts as its creditors dragged their feet.

In October 2022, the World Bank approved a $275 million grant to the Southern African nation to help it recover from the effects of the Covid-19 pandemic, the spillovers from the war in Ukraine and emerge from its debt crisis.

Zambia was the first African country to default during the Covid-19 era as it struggled with debt that reached 133 percent of GDP at the end of 2021.

The nation’s economy fell into a deep recession due to the adverse impact of the pandemic.

In October 2022, the country’s finance ministry announced that Zambia’s external public debt reached $14.87 billion at the end of June 2022.

The restructuring of Zambia’s external debts of almost $15 billion with creditors, including China and Eurobond holders, has been greatly delayed.

In a statement, World Bank President, David Malpass, said that Zambia urgently needs debt relief to restore medium-term debt sustainability and attract the new investment needed for growth and jobs.

He said, ‘I remain deeply concerned by the slow pace of the creditors’ committee and the impact of the delays on growth and poverty’.

The statement further said that Zambia had continued to implement agreed structural policies to achieve macroeconomic stability even as its official bilateral creditors delayed discussing and finalising debt treatment for the country under the G20’s Common Framework.

President Hakainde Hichilema on Tuesday said Zambia had agreed to the principles of debt restructuring with its creditors and is focused on signing an agreement on its terms with them by the end of March.

Photo source: Mike Rosenberg