G20 official says valuable lessons abound from Zambia’s successful debt restructuring experience

Those involved in Zambia’s restructuring will discuss lessons learned to help other countries such as Ghana to expediate the process, says Ricardo Klinger, Brazil’s Finance Ministry official in the G20 International Financial Architecture Working Group.

Brazil currently holds the G20 presidency.

Klinger said Zambia’s experience would be used by other countries and the G20 Common Framework on future debt restructuring.

“The stages are being completed more quickly because it is a learning process,” Klinger told Reuters news.

He also said the G20 Common Framework aimed to publish a document in July incorporating feedback from all sides of Zambia’s restructuring to identify bottlenecks and potential improvements to gain time.

“The document seeks to synthesise this learning in these recent cases to build a more refined process,” Klinger said.

Others agreed with Klinger that Zambia’s pain could help forge a successful framework.

Portfolio Manager for Emerging Markets Debt at Allianz Global Investors, Giulia Pellegrini, predicted that there would be some transferable skills and lessons.

“Some of those lessons will be put to work in Ghana, and some will be put to work in Ethiopia. There is definitely a lot of push to have more successful cases,” she said.

Ghana is currently in formal talks with holders of more than US$13 billion in international bonds and wants to speed up remaining negotiations.

Ethiopia defaulted on its sole US$1 billion Eurobond in December, but talks with bondholders have been slow.

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