GABORONE, Botswana — Last week, Zambia became the first African country to default on its sovereign debt amid the COVID-19 pandemic.
This came after Eurobond holders rejected Zambia’s request to defer interest payments for six months, leaving the country with less than 24 hours to make an interest payment of $42.5 million — a demand it couldn’t meet.
Trevor Hambayi, a Lusaka-based financial analyst, explained that defaulting means the country’s credit rating will move into junk status and it won’t be able to access the loans it needs to support development.