FINANCE permanent secretary for budget and economic affairs Mukuli Chikuba says the ministry is in talks with the bondholders on the way forward following the country’s default on interest payment on Eurobonds.

Finance Minister Dr Bwalya Ng’andu last week disclosed that Zambia’s Eurobond holders, Friday, rejected government’s request for modifications and waivers and the deferment of interest payments due on each bond between October 14, 2020, to April 14, 2021, triggering and confirming a sovereign debt default.

The bondholders’ rejection follows the Zambian government’s request for a suspension of debt interest payments on all three of its Eurobonds for a period of six months, effective October 14, 2020, in response to the challenging fiscal situation.

However, following a meeting to vote on this request by bondholders to grant the request to freeze interest payments for at least six months, Zambia has officially defaulted on its sovereign debt after the country missed a coupon payment of more than US $40 million, which fell due last month, whose 30-day grace period lapsed, Friday.

“The Government of the Republic of Zambia wishes to announce that the Extraordinary Resolutions set out in the notices of the adjourned meeting of Zambia’s Eurobond holders dated 20th October, 2020, which was subsequently held today, 13th November, 2020, were not passed. Accordingly, the modifications and waivers, including the deferral of interest payments due on each of the bonds during the period from 14th October, 2020, until 14th April, 2021, requested by Zambia will not be implemented,” Dr Ng’andu said in the statement.

This means that Zambia has made history by becoming the first African country to default on sovereign debt since the Coronavirus pandemic outbreak, with severe consequences possibly leading to sovereign asset seizures by some of the country’s creditors.

And in a brief interview, Chikuba said the ministry is still in talks with the bondholders as he confirmed that the interest payment were not made.

“The payment wasn’t made but we are still speaking with the bondholders on a way forward,” said Chikuba.