Zambia and Saudi Arabia Formalize Debt Restructuring Agreement

Zambia and Saudi Arabia have signed a debt restructuring deal to reschedule over $130 million of Zambia’s debt, reflecting a commitment to fiscal sustainability and economic growth. Alongside this agreement, a $35 million loan was approved for health infrastructure. This follows Zambia’s previous restructuring agreements, including one with France, aimed at managing national debt.

Zambia and Saudi Arabia have formalized a debt restructuring agreement aimed at rescheduling over $130 million of Zambia’s debt to the Kingdom. The agreement was signed in Lusaka by Zambian Minister of Finance and National Planning, Situmbeko Musokotwane, and Sultan bin Abdulrahman Al-Marshad, CEO of the Saudi Fund for Development. This initiative underscores both nations’ commitment to enhancing fiscal sustainability and driving economic growth through constructive dialogue. In addition to debt restructuring, agreements were made for a $35 million loan intended for the construction of the King Salman Specialized Hospital in Zambia. This arrangement with Saudi Arabia follows Zambia’s recent debt restructuring agreement with France, demonstrating a broader strategy to address national debt issues under the support of the International Monetary Fund. Zambian authorities expressed gratitude to the Saudi leadership and emphasized the significance of ongoing partnerships for national development.

The debt restructuring agreement between Zambia and Saudi Arabia is critical for addressing Zambia’s financial challenges. Following a history of debt issues stemming from the Heavily Indebted Poor Countries initiative in 2005 and subsequent significant investments primarily from Chinese state-owned banks, Zambia has faced rising debt levels. The country declared a sovereign default in December 2020, leading to prolonged negotiations under the G20 Common Framework, which revealed weaknesses associated with handling such debts in developing nations. This recent agreement represents an essential step towards creating a sustainable financial future.

In conclusion, the signing of the debt restructuring agreement between Zambia and Saudi Arabia is a pivotal moment in managing Zambia’s financial obligations and achieving long-term fiscal sustainability. The commitment from both nations represents a collaborative effort to facilitate economic recovery and development in Zambia. The additional funding for healthcare infrastructure further indicates a multifaceted approach to managing national challenges. Overall, these agreements signify Zambia’s ongoing efforts to stabilize its economy and engage in constructive international partnerships.

Original Source: www.dailynewsegypt.com