Zambia has signed an official creditor agreement with China and India and is now in negotiations with private creditors, according to President Hakainde Hichilema on Saturday.

Zambia has fought to resume its debt restructuring process following the rejection of a deal to rework $3 billion of Eurobonds by official creditors, including China.

The principal reason for the rejection was the creditors didn’t believe the deal offered comparable debt relief to that of bondholders, Reuters reports.

At the end of last week, the country’s finance minister Situmbeko Musokotwane said the government was attempting to clarify the definition of “comparable treatment” with bondholders.

“This concept [of comparability of treatment] was not properly clarified, leading to ambiguous understanding by different creditors,” Musokotwane told Zambia’s parliament last week. “With progress made to clarify the term, this should pave the way for agreement on the private creditors as well.”

Hichilema has now stated that the two countries have now signed the agreement.

“On the official creditors' side, the last two countries that had not signed, China and India, have now signed. So we are now turning to the private creditors,” President Hichilema said during a live address at a traditional ceremony in Chipata.

Zambia defaulted on its foreign debts back in November 2020 and a series of delays have plagued the restructuring process.

The country is using the Common Framework, which was a process established in response to the Covid crisis by the G20, to introduce China, India and other bilateral creditors that do not belong to the Paris Club of creditor nations.

Although Beijing became the world’s biggest lender to poor countries over the past decade, it has remained outside the Paris Club of creditor nations, Financial Times reports.

Furthermore, whilst Zambia is in default, the country’s central bank has been tackling the Kwacha’s depreciation against the Dollar as well as an inflation revival.