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Zambia’s debt deal may face a geopolitical tug of war

Tuesday, February 14, 2023

Significance

A deal under the G20 Common Framework for Debt Treatment was expected by end-2022. However, amid geopolitical tensions, China has been blamed for the delay by figures including US Treasury Secretary Janet Yellen and World Bank President David Malpass.

Impacts

  • The delay could put further strain on the kwacha, which has already lost 26% of its value against the dollar in just five months.
  • Although inflation is currently broadly under control, further depreciation may upset prices as Zambia is a net importer of many goods.
  • Alongside Western rhetoric, Musokotwane’s comments may complicate ties with China, a major creditor and a key consumer of copper exports.

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