Zambia’s Debt Default Poses Questions For China

ZAMBIA became the first country to default on almost $12m in Eurobond repayments on Tuesday, as fears grow of a wider debt crisis on the continent and Beijing mulls its response. 

Africa’s second largest copper producer is struggling to balance its payments amid dwindling copper revenues that provide 70% of its export earnings.

On Tuesday, the government told bondholders there would be delays in the repayment of interest on three of its eurobonds totalling $3bn until next year.

The current debt crisis unfolding in the region poses a number of challenges for dominant lender China, as African governments struggle to finance debt repayments to Beijing, said Elling Tjønneland, a senior researcher at CHR Michelsen Institute (CMI).

“The whole crisis that we are witnessing poses a number of new challenges for China’s role in Africa,” he says.

China will now have to work with multinational lenders to Africa like the World Bank