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Zambia’s Default Sparks Renewed Concerns Over High Levels of Chinese Debt in Some African Countries

Zambia's President Edgar Lungu shakes hands with China's President Xi Jinping before their bilateral meeting at the Great Hall of the People on September 1, 2018. Nicolas ASFOURI / POOL / AFP

Zambia’s default over the weekend on a portion of its Eurobond debt prompted renewed concerns about the lack of transparency in Chinese lending and whether weak governance systems in a number of African countries are up to the challenge of managing the burgeoning financial crisis.

Latest Commentary and Coverage of the Zambian Debt Crisis:

  • THE AFRICA REPORT: “The long-term consequence of Zambia’s default may be to deter Western lending to countries where China is already a creditor. “Zambia should come clean on its Chinese public and private debt,” said Steve Hanke, a monetary policy expert and professor of applied economics at Johns Hopkins University. “Zambia has been playing with smoke and mirrors on its Chinese debt, and its other creditors are rightfully fed up.”” — David Whitehouse, Business Editor (READ MORE)
  • DAILY MAVERICK: “As Zambia battles to repay its debt obligations, the continent and international community are reminded of the deep-seated structural and systemic governance challenges that continue to undermine the continent’s development. The much-touted African Continental Free Trade Area will not deliver any results if the member states fail to rein in their fiscus. China must be an honest partner on the continent instead of creating relationships that force African countries to be financially and politically indebted to its rising power at the expense of their citizens’ welfare.” — Azwimpheleli Langalanga, Senior Associate: International Trade and Investment Policy at Tutwa Consulting Group (READ MORE)
  • THE WALL STREET JOURNAL: “Finance Minister Bwalya Ng’andu said confidentiality agreements prevented him from disclosing the terms of the country’s loans from China. But, he said, the government had presented bondholders with its own confidentiality agreement, which, if signed, would allow it to give them more information on its Chinese borrowing… bondholders declined to sign the agreement because the government hadn’t given assurances on all their questions, including the equal treatment of creditors.” — Gabriele Steinhauser and Joe Wallace (READ MORE)


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