Zambia's debt relief a 'top priority' for US, says Janet Yellen

US Treasury Secretary Janet Yellen

US Treasury Secretary Janet Yellen who is heading for an 11-day trip to Africa starting this week, aimed at deepening economic ties on the continent where China has become a key player. PHOTO | KEVIN DIETSCH | GETTY IMAGES | AFP


US Treasury Secretary Janet Yellen has said restructuring Zambia's debt is a top priority during her visit of the debt-ridden African country on Monday.

In 2020, as the Covid-19 pandemic battered Africa, Zambia became the first country on the continent to default on its foreign debt, estimated at $17.3 billion.

It has sought help through a G20 mechanism, but implementation has been slow, with the US accusing China -- the main creditor to many African nations -- of dragging its feet.

"I consider the timely finalization of the debt treatment for Zambia to be a top priority for the Treasury Department," Yellen said as she met Zambia's Finance Minister Situmbeko Musokotwane in Lusaka.

"We will continue to press for all critical bilateral and private sector creditors to meaningfully participate in debt relief for Zambia, especially China."

Yellen also met with President Hakainde Hichilema, a businessman turned politician, who swept to power in 2021 on promises to revive the economy.

"It is our view that timely and comprehensive debt treatment can serve the interests of both debtors and creditors," she told the president.

Hichilema said he was hoping the debt restructuring could be completed in the next couple of months.

"Zambians have a deadline. We believe it should be resolved by March. As long as we don't resolve this issue, it will distort the gains we have made so far," he said.

The president earlier met with International Monetary Fund Managing Director Kristalina Georgieva who praised the government's reforms and prudent use of public funds.

Last year, the IMF approved a $1.3 billion loan to help Zambia restore fiscal stability.