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Zambia has made significant progress with its debt restructuring, having achieved over 92 percent agreement in principal with its creditors amounting to US$12.4 billion, authorities have revealed.
Of this amount, US$4.01 billion is said to have been restructured in 2024, US$2.70 billion in 2025 and the balance of US$5.7 billion yet to be concluded, according to Secretary to the Treasury, Felix Nkulukusa.
Nkulukusa announced this during the Town Hall Forum on the First Half of 2025 Budget Performance and Economic Developments held at Mulungushi International Conference Centre in Lusaka on Thursday.
He assured that the Zambian government continued to engage with the remaining 7.8 percent, of whom were private creditors, not yet agreed in principle, and in good faith.
“While external debt has been restructured, there is an increase in domestic debt stock by 681.3 percent to K192.99 billion in 2021 from K24.70 billion in 2015,” Nkulukusa said.
He stated that most of the borrowing was between 2016 and 2021 when Zambia defaulted on external debt service and was in government bonds which had a medium to long terms maturities.
Nkulukusa said the bonds which were maturing now had caused a strain on the fiscus as more money was now going towards debt servicing.
“The debt service to revenue ratio is currently calculated at 24.2 percent in 2025 and not 14 percent which is the target, mainly on account of PDI accrued in 2023 and 2024, as well as the fuel liability management operation,” he said.
Nkulukusa stated that accordingly, to resolve the breach, Zambia would need about $3,054 million in new revenue measures to meet the Debt Service Agreement programme parameters.
Additionally, the Gross international reserves increased to US$4.5 billion equivalent to 4.6 months of import cover at end March 2025 from US$4.3 billion at end-December 2024.
“This was mostly due to net Bank of Zambia forex purchases from the mines, non-tax foreign exchange revenue and project receipts largely underpinned the rise in the reserves,” he said.
Nkulukusa stated that with increasing mining production, restored debt sustainability and effective reforms, Zambia was projected to experience a robust rebound with a 6.4 percent projected GDP growth in 2026 and a positive current account balance.
He said the developments in the first half of 2025 reflected both Zambia’s resilience and the impact of the reforms that the government had continued to implement under the 8National Development Plan.
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