Zambia will not pay euro bond due in September – finmin

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LUSAKA – Zambia will not pay its 750 million euro bond due in September until new payment terms are agreed between the government and bondholders, its finance minister, Situmbeko Musokotwane, said on Sunday.

The International Monetary Fund (IMF) on Thursday approved a 38-month $1.3 billion lending program, a move taken after its main creditors China and France agreed in July to negotiate to restructure debt of the southern African country.

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“The bonds are maturing (but) we will not pay on that basis. Let’s talk. Let’s agree on new terms before we can start the service,” Musokotwane told local news channel ZNBC in an interview.

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Negotiations with private creditors are likely to be difficult, but Zambia has the support of the international community, the minister said.

Zambia has become the first African country to default in the pandemic era in 2020, struggling with debt that has reached 120% of its gross domestic product.

In addition to the $750 million bond, Zambia has a $1 billion bond due in 2024 and another $1.25 billion bond due in 2027.

Musokotwane said the government had agreed with the IMF to put measures in place to ensure that Zambia would not fall back into unsustainable debt. (Reporting by Chris Mfula; Writing by Promit Mukherjee; Editing by Andrew Cawthorne)