The US expects bilateral creditors to apply common principles agreed upon on completing Zambia’s debt treatment to other cases such as Ghana and Sri Lanka to meet the International Monetary Fund’s (IMF’s) first programme review later this year, US Department of Treasury Secretary Janet Yellen said.

Speaking to the media at the G20 Finance Minister’s meeting in India yesterday (16), she said although it took too long to negotiate a debt treatment for Zambia, it shows that creditors can overcome differences and agree on common principles for debt relief. 

“We should apply the common principles we agreed to in Zambia’s case, in other cases rather than starting at zero every time and we must go faster,” she said.

She said they expect debt treatment for Ghana and Sri Lanka to be finalised quickly so that the IMF can move forward with their first programme review of the two countries later this year.

Last month, Zambia successfully struck a deal to restructure $ 6.3 billion of its debt owed to bilateral creditors, of which $ 4.1 billion is owed to China while according to Reuters, the country is also expected to come to an agreement with its private creditors to treat $ 3 billion by the end of this year.

The IMF’s Article IV consultation on Zambia released last week, said that bilateral creditors agree to a clarification on IMF program parameters and debt sustainability targets; the contribution of Multilateral Development Banks (MDBs) to the restructuring effort, concessional positive net financing flows; the exclusion on non-resident holders (NRH) of domestically-issued debt from the proposed debt treatment; and the inclusion of State-Owned Enterprise (SOE) debt related to financially viable projects.

However, official creditors had recognised that these issues deserve further discussion in other debt treatment cases, as well as a more systematic approach through exchanges in relevant fora.