Zambia on brink of debt default after moratorium refused
Lusaka: Zambia was on the brink of defaulting on its foreign debts on Friday after the government said creditors had rejected a moratorium on its interest payments.
The coronavirus pandemic has badly hit the landlocked southern African country's already struggling economy, and its external debt has surged to nearly $12 billion this year.
Scrambling to avoid becoming the first African country to default during the pandemic, the government in September requested a six-month deferral on interest payments for three commercial eurobonds worth $3 billion. But it missed a $40 million interest payment due on one bond on October 14, leading to ratings agency S&P declaring the country in default.
The grace period for the missed payment ended Friday on a $750 million eurobond due to expire in 2022.
"While the government regrets that the bondholders did not approve the requests made by Zambia in good faith, we remain committed to finding a consensual and collaborative resolution to debt sustainability issues," Finance Minister Bwalya Ng'andu said in a statement. - AFP