• A third party is willing to assume Zambia’s $45 million debt to Afreximbank, potentially unlocking the country’s five-year debt restructuring impasse.
• The dispute centers on Afreximbank’s claim to privileged creditor status, which could exempt it from debt relief under Paris Club rules.
• A resolution could set a precedent for African multilateral banks and reshape sovereign debt hierarchies on the continent.

Zambia may find a path out of its prolonged debt restructuring stalemate. Treasury Secretary Felix Nkulukusa announced on Oct. 27 that a third party has agreed to take over the country’s debt to Afreximbank, allowing negotiations to proceed without direct conflict.

The $45 million debt, though modest relative to Zambia’s $13 billion external obligations, has become a legal flashpoint over the role of African multilateral banks in sovereign debt restructuring. Afreximbank asserts privileged creditor status, meaning it would be repaid in full before other creditors and would resist any haircuts or deferred payments.

For over a year, Zambia and its creditors have disagreed on whether Afreximbank should be treated comparably to other lenders. Lusaka, backed by the Paris Club and the Official Creditors Committee (OCC), argues that Afreximbank loans must be restructured on a “comparability of treatment” principle, which requires all creditors to receive similar terms.

Afreximbank counters that it enjoys multilateral protections akin to the World Bank or African Development Bank, a position that has stalled negotiations. Nkulukusa noted that the bank threatened international arbitration, though it has not acted on that threat.

The proposed third-party transfer would allow Zambia to restructure debt under Paris Club rules while avoiding direct legal confrontation with Afreximbank.

Observers see the case as a test of African multilateral banking governance. Afreximbank and the Trade and Development Bank of Eastern and Southern Africa (TDB) face similar issues in Ghana and Malawi, concerned that restructuring inclusion could limit access to international markets.

Credit rating agencies share these concerns. Fitch recently downgraded Afreximbank to BBB-, citing exposure to distressed African states. Conversely, debtors see a potential precedent that could rebalance creditor hierarchies and strengthen Africa’s financial architecture.

Even if the transfer proceeds, a complete resolution is not guaranteed. Afreximbank has yet to confirm consent, and the Paris Club requires proof of comparability before finalizing a global agreement. Sources close to the negotiations suggest the restructuring may extend into 2026, delaying Zambia’s return to international capital markets.

This article was initially published in French by Fiacre E. Kakpo

Adapted in English by Ange Jason Quenum