China to help restructure SL, Zambia debt: France

PARIS, AFP: Leaders at a global finance summit are close to sealing deals to restructure Zambia and Sri Lanka’s debts with the agreement of major creditor China, France’s Economy Minister said Thursday.

Zambia, Africa’s biggest copper producer, defaulted on its $ 18.6 billion external debt in 2020 and Sri Lanka followed in 2022, defaulting on $ 46 billion of loans, with China the biggest creditor of both nations.

France said Beijing was on board to discuss restructuring both countries’ debts at the summit in Paris attended by Chinese Premier Li Qiang among other world leaders.

“We are on the verge of reaching an agreement” for both countries, said French Economy Minister Bruno Le Maire on Radio France Internationale, hailing it as “very good news”.

“We want to do it with our Chinese partners, and the Chinese premier’s presence is a decisive sign of China’s willingness to take part in this debt restructuring.” The United States had accused China of dragging its feet on a debt agreement for Zambia, the first African country to default during the Covid crisis.

The two-day Paris summit is focussed on reforming the global lending system in the face of the rising costs of damage from climate change.

The eve of the summit saw a meeting of the Paris Club, a group of creditor countries that seeks to help struggling countries pay their debts - of which China is not a permanent member.