By Chris Mfula
LUSAKA (Reuters) -Zambia’s treasury secretary said on Monday a third party had expressed interest in taking over Zambia’s debt to the African Export-Import Bank, or Afreximbank, offering a possible path past a hurdle that has kept the country in debt default.
Treasury secretary Felix Nkulukusa did not name the third party. Reuters could not immediately reach Afreximbank for comment.
A dispute over whether Zambia must restructure debts to Afreximbank have complicated – and extended – its painful path out of debt default.
Nkulukusa said Afreximbank had said it intended to take Zambia to arbitration over the debts, but had not yet done so.
“There is another avenue that has come on the table where one of the third parties have come and have expressed interest that they can be able to subrogate this debt,” Nkulukusa told journalists.
Zambia owes roughly $45 million to Afreximbank, according to think tank ODI.
ZAMBIA HAS ‘NO PROBLEM’ ASSIGNING DEBT TO A 3RD PARTY
He said the bank had reached out in August, and Zambian officials responded in September, indicating they had no problem assigning the debt to a third party.
“We will owe that third party and therefore all we need is a deed of assignment” before the debt can be restructured “in accordance with the comparability of treatment under the (Official Creditor Committee),” he said.
Afreximbank has insisted that it is a multilateral lender with “preferred creditor status” that shields it from losses in a debt restructuring.
But sources previously told Reuters that the Paris Club group of official lenders made clear to Zambia and Ghana that they must restructure their debt to Afreximbank, as well as to the Eastern and Southern African Trade and Development Bank (TDB) under comparable terms to other creditors.
The Paris Club of official lenders did not immediately respond to a request for comment.
(Reporting by Chris Mfula, writing by Libby George; Editing by Amanda Cooper and Bernadette Baum)
