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Zambia to cancel projects worth $2bn due to debts

Drilling operations at a depth of 516 metres below the surface at the Chibuluma copper mine in the Zambian copperbelt region, January 17, 2015. Photo: Reuters

Zambia is cancelling more than $2 billion worth of projects financed by commercial loans to reduce the risk of accumulating more non-concessional debt, the ministry of finance says.

In 2020, Zambia became the first nation to default in the COVID-19 era. At the end of 2021, its external debt stood at $17.27 billion, of which China held $5.78 billion, and it is in negotiations with creditors and the International Monetary Fund (IMF) to lift itself out of this debt hole, Reuters reports.

The east african country was in the process of cancelling projects worth an estimated $2.1 billion, according to the medium-term budget plan published by the ministry of finance late on Saturday.

Though no details have been given.

Zambia’s economic growth in 2022 is expected to slow down to 3.1% from 3.6% recorded in 2021 mainly due to the expected reduced output from the agricultural sector.

Writing by Muzha Kucha