Zambia’s Looming Default Is Only the Start of a Global Reckoning With Debt

Zambian President Edgar Lungu shakes hands with Chinese leader Xi Jinping at the Great Hall of the People, in Beijing, Sept. 1, 2018 (pool photo by Nicolas Asfouri via AP).
Zambian President Edgar Lungu shakes hands with Chinese leader Xi Jinping at the Great Hall of the People, in Beijing, Sept. 1, 2018 (pool photo by Nicolas Asfouri via AP).

With its economy in trouble from a high public debt burden as well as the COVID-19 pandemic, Zambia’s government recently suspended interest payments on some sovereign bonds. The country is already in arrears on some of its debt—including $183 million in official bilateral loans from other countries and $256 million from commercial banks—and has asked for a six-month suspension on interest payments from the holders of its $3 billion in Eurobonds, which are denominated in foreign currencies. These bondholders are due to make a final decision on Zambia’s request in mid-November, but a substantial portion of them have so far […]

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