July 30, 2022 12:34 pm ET
China and other government creditors to Zambia said Saturday they will negotiate debt relief for the southern African copper producer, marking a milestone in an international effort to avoid a wave of chaotic defaults among developing countries as interest rates rise worldwide.
Zambia’s request to restructure some $17 billion in foreign-currency debt is the first real test of a process created by the G-20 in late 2020 aimed at getting China, which in recent years has become the biggest government lender to poor countries, to join international debt-relief efforts when these countries run into payment trouble. The so-called Common Framework for debt treatments also requires defaulting governments to negotiate debt write-downs with their private creditors—including international banks and bondholders—in line with those offered by government creditors.
