Zambia in November became the first African country to default on foreign debt during the coronavirus pandemic. At the time, it was discussing new financing with the International Monetary Fund, which hadn’t extended a loan to the nation since 2008. Presidential elections held on Aug. 12 complicated the talks because the IMF couldn’t be sure who it would be dealing with. Now Zambia has a new leader, who wants to pin down funding as quickly as possible.
The Patriotic Front party, which took power in 2011, embarked on a spending spree, building thousands of miles of new roads, airports and rural healthcare facilities. In the process, it amassed $13 billion of foreign debt. The government’s ability to meet its obligations was eroded because it discouraged investment with attempts to extract more revenue from the mining industry, the bedrock of the economy. The pandemic made the situation worse, with gross domestic product contracting 3% in 2020.