Lessons from Zambian Debt Restructuring

Zambia's recent debt restructuring process reveals several critical lessons about the current international framework for managing sovereign debt crises. One major takeaway is the inadequacy of the common framework established post-COVID-19, which was supposed to facilitate better coordination among creditors. The case of Zambia illustrated issues with comparability of treatment, especially between official creditors like China and private creditors, where the lack of robust guidelines led to disputes over fairness in burden sharing. This raises questions about whether the existing restructuring architecture is sufficient to handle the complexities of modern sovereign debt scenarios.