Yellen Urges China to Relieve Zambia’s Debt
As part of her Africa tour (#YellenAfrica2023), US Treasury Janet Yellen reached the second stop in Lusaka, Zambia on 23 January 2023. During a press conference at the Zambia National Public Health Institute (ZNPHI), Secretary Yellen told reporters: “The US will continue to push creditors to provide relief, especially China.”
In Zambia, Secretary Yellen met with her counterpart, the Minister of Finance, Dr Situmbeko Musokotwane and the Zambian President Hakainde Hichilema. In addition to debt restructuring, the talks also included cooperation in health security.
Currently, Zambia external debt stands at about USD 17 billion, with about one-third or USD 6 billion owed to China. In 2020, Zambia defaulted on its #EuroBond payment and since then, negotiations about debt relief have been ongoing. Secretary Yellen pointed out that a prolonged debt crisis could significantly jeopardize the economic recovery of Zambia, stunt economic growth as credit for development is squeezed, leading to Zambians sliding into joblessness and poverty.
Before her tour to Africa, she took part in the World Economic Forum 2023 in Davos, Switzerland. There, she had a bilateral with Chinese Vice Premier and Economic Tsar Liu He. She described her dialogue with Liu He as “constructive.” During her conversation with Liu He, she specifically raised the case of Zambia and regretted that a solution to the Zambian debt crisis “has taken far too long already.”
Zambia has become a crucial test case for the #G20 Common Framework (#GCF) for debt restructuring which brings Western creditors and China around the same negotiating table. To give fresh impetus to find a solution for Zambia, the IMF Managing Director Kristalina Georgieva is visiting Zambia in the same week that US Secretary Yellen is there.
Responding to Secretary Yellen, the Chinese Embassy in Lusaka urged the US to “sweep in front of its own door first and to stop sabotaging a sovereign nation’s efforts to solve its debt issues.” Zambian Finance Minister Musokotwane conceded that it was becoming ’embarrassing’ for Zambia to talk about the debt issue and deplored the slow progress despite the fact that “Zambia has fulfilled all its commitments.”
On another note, Secretary Yellen praised the partnership in the health sector between the US and Zambia. Initially, health partnership started around the fight against HIV/AIDS and malaria. With the onset of the #COVID pandemic, that partnership expanded to reinforce capabilities to deal with sudden disease outbreaks. In particular, the US CDC will train Zambian epidemiologists so that they can undertake early detection of epidemics and better respond to such situations in the future.
Secretary Yellen underscored that the US remains committed to improving global health security. Actually, a Pandemic Fund endowed with USD 450 million has been set up specifically to invest in projects which can contribute to fill gaps in pandemic preparedness.