Zambia will host a Chinese premier on Wednesday for the first time in 28 years as the sub-Saharan state emerges from a financial crisis, with Beijing eager to access commodities and develop a bigger market for its exporters.
China is Zambia’s largest official creditor, owed $5.7 billion and keen to highlight countries that are model members of President Xi Jinping’s flagship Belt and Road infrastructure initiative.
China has said it would also like to show how African nations can recover from financial crises with its assistance.
Premier Li Qiang’s arrival in Lusaka is part of a push to deepen China’s presence in the copper-rich country as Europe and the U.S. vie to be alternative benefactors now that Zambia’s $13.4 billion in debt is on a more sustainable repayment plan.
Industrialising Zambia needs fresh investment in mining, infrastructure and production capacity, while China wants to boost exports of tractors, electrical equipment and construction vehicles.
The World Bank expects Zambia’s economy to grow 6.5% next year, outstripping an average of 5% over the past two decades.
“Li is going to bolster China’s presence in a strategically vital country,” said Eric Olander, co-founder of the China-Global South Project.
Both President Hakainde Hichilema and Chinese mining companies need support, he added.
Olander was referring to a February acid spill at a Chinese-run copper plant that dumped 50,000 cubic metres of contaminated water into the Kafue River, a key source of supply to millions of people, which is now a major election issue.
“China this year also approved a massive refurbishment of the Tazara Railway that is widely seen as a counter to the U.S./EU-backed Lobito Corridor.”
China financed the line in the 1970s to reach Zambia’s vast copper deposits through Tanzania on Africa’s east coast and continues to invest as the West builds up its route to the country via Angola and the Democratic Republic of the Congo.
“The debt issue is largely seen as settled,” he said.
Han Jing, China’s ambassador to Zambia, said Li’s visit was expected to produce dozens of cooperation agreements, the embassy said on Facebook.
“The impact of Chinese aid and investments can be felt across the country as an important force for economic transformation and the social progress of Zambia,” Han said.
Li is set to meet Hichilema on Thursday.
INVESTMENT OVER LOANS
Governments across the African continent shifted to seeking investment after the COVID-19 pandemic forced many nations to borrow heavily to fund health responses, weakening their ability to repay creditors and pushing several into debt distress.
One reason Zambia’s debt restructuring dragged on for 3-1/2 years was that it had a large number of Chinese creditors, making it difficult for the government to assert control over the process, analysts said.
“The assertion that ‘China has been slow to act in debt restructuring negotiations with Zambia’ is at odds with the facts,” China’s foreign ministry said, adding that Li’s visit would boost cooperation to benefit the people of both countries.
Chinese companies have invested about $6 billion in Zambia over the last two decades, data from the American Enterprise Institute shows, almost all in the metals sector.
These companies now face increasing pressure from European and American firms.
The European Union’s top official for international cooperation and development visited this month to unveil fresh investments along the Lobito Corridor.
Donald Trump Jr., the eldest son of U.S. President Donald Trump, met Hichilema on Sunday, a post on the Zambian leader’s X account showed.
