Zambian treasury confirms Afreximbank loan to be restructured

Secretary to the Treasury, Felix Nkulukusa, has confirmed that Zambia’s loan with the African Export-Import Bank (Afreximbank) is a commercial facility and will be restructured.

Speaking to Reuters in Lusaka, Nkulukusa said discussions with the African development lender were ongoing.

“We are still negotiating with them. The debt will be restructured,” he stated. “It’s not a concessional loan, it’s a commercial loan.”

The Afreximbank has previously argued that, as a multilateral institution like the International Monetary Fund (IMF) or World Bank—which lend at concessional, below-market rates—it should be exempt from losses in the event of a country default.

However, some of its lending is commercial and generally subject to restructuring.

Sources told Reuters in April that the Paris Club group of official lenders had made it clear Zambia must restructure its debts to Afreximbank as part of its broader debt resolution plan.

This development comes in the wake of a credit rating downgrade for Afreximbank by Fitch Ratings, which earlier this week lowered the lender’s rating to one notch above junk with a negative outlook, citing elevated credit risks and weak risk-management practices.

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