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Zambia Celebrates Debt Deal

FILE: Representative illustration of Zambia's parliament, taken Feb. 24, 2012. On June 22, 2023, Members of Parliament celebrated news that the nation's crushing debt will be partially restructured, providing a measure of relief.

LUSAKA — Jubilant lawmakers in Lusaka sang Zambia's national anthem on Friday after foreign lenders agreed to restructure part of the country's debt, a move that entrepreneurs said brought hope for the crippled economy.

Relief was palpable in the capital Lusaka, where legislators in parliament belted out the national anthem in celebration.

In the city's business district, groups of people shared copies of the morning newspapers, whose front pages were dominated by the debt story.

"It's finally done," the Zambia Daily Mail headlined, while the Times of Zambia led with "Bailout."

The country's total debt at the end of 2022 amounted to $32.8 billion, including $18.6 billion owed to foreign lenders, according finance ministry figures.

Part of the debt is held by the International Monetary Fund (IMF), World Bank and multilateral development banks and is not covered by the restructuring.

A French official said the agreement covered $6.3 billion of bilateral debt, of which $4.1 billion is owed to China.

Private creditors, who are owed $6.8 billion, will have to "make a similar effort to what we have done," the official said.

The restructuring deal came on Thursday at a two-day summit in Paris hosted by French President Emmanuel Macron.

The victory is a major success for President Hakainde Hichilema, who swept to power in 2021 on the back of promises to revive the economy, root out graft and woo back scared investors.

"Unlike our colleagues that defaulted on repaying the debt we have secured a debt restructuring program," said Garry Nkombo, an MP with Hichilema's party.

Mooya Chilala, who runs a small business selling fertilizer and seeds, said he believed the deal would ease economic pressure on Zambia and improve living conditions for many people.

"This is something that the previous government attempted for years," the 44-year-old father of four said. "It's a good thing for the country."

Zambia is Africa's biggest copper producer, with a population of nearly 20 million people.

It ran up huge debts under former president Edgar Lungu, who borrowed heavily for infrastructure projects during his six years in power.

Negotiations on restructuring had stumbled over differences between creditors, with the United States accusing China - the biggest single lender - of delaying an agreement.

In a tweet, Hichilema said the agreement was a "significant milestone in our journey towards economic recovery (and) growth."

In a statement, the government hailed a "significant step towards restoring Zambia's long-term debt sustainability." It said it looked forward to working the creditors to ensure "prompt implementation."

Hichilema, a businessman-turned-politician, had contested five elections before securing the top job.

His smooth transition into power after fears of unrest is also seen as providing a boost for investors.