Zambia denies US claims of Chinese takeover of power company

Zambia has denied claims by a White House official that China is about to take over its state power utility to recover $6-10 billion debt, noting the utility was never provided as collateral and its debt to Beijing was only $3.1 billion.

U.S. National Security Advisor John Bolton said on Thursday that China’s quest for more power in Africa was evident in nations like Zambia, and China was poised to take over Zambia’s utility company Zesco to collect the debt.

Zambia’s presidential spokesman Amos Chanda told Reuters the figure of between $6-10 billion given by Bolton was wrong. Zambia’s total external debt was now $9.7 billion including $3.1 billion owed to China, he said.

“It is regrettable that such information can come from such a high-ranking official. In fact, Zesco is not within the scheme of Zambia’s debt to China,” he added.

Chanda said Zambia valued its relations with both China and the US and would not deal with either of them exclusively.

Bolton had called the business practices of China and Russia in Africa “corrupt” and “predatory” and said the United States planned to counter their economic and political influence.

In June, Zambia decided to delay all planned borrowing indefinitely, slowing down the accumulation of new debt amid worries about the risk of debt distress.

President Edgar Lungu said last month Zambia is committed to improving the transparency of its debt management and will ensure that debt levels remain sustainable.

The IMF rejected Zambia’s borrowing plans in February, saying they risked making its debt load harder to sustain.

Finance minister Margaret Mwanakatwe said last month the government plans to send a delegation to China by the end of this year to discuss Zambia’s debt and debt restructuring.

Source : REUTERS