By John Chola

Zambia has locked in a €94.6 million debt relief deal with Italy, pushing the repayment deadline back by 16 years to 2043—a move designed to ease immediate financial strain and carve out room for vital public spending.

The agreement, sealed under the G20 Common Framework for Debt Treatment, overhauls the terms of a loan originally signed in June 2018 between the Zambian government and Italy’s Intesa Sanpaolo banking group.

The debt, which funded defence-related supplies, was initially due in 2027 but will now stretch to 2043.

Speaking at the signing ceremony on Friday, March 20, the Minister of Finance and National Planning, Situmbeko Musokotwane hailed the extension as a pivotal step in Zambia’s broader debt restructuring push—a drive set in motion after the country’s 2021 default.

“This deal not only eases the pressure of debt service but also carves out the fiscal space the government urgently needs for critical investments in infrastructure and social protection,” Dr Musokotwane said.

The restructuring is part of Zambia’s wider effort to regain debt sustainability and rebuild macroeconomic stability after years of strain worsened by the COVID-19 pandemic, climate shocks, and a heavy external debt load.

He noted the agreement signals growing international confidence in Zambia’s reform agenda and reflects strong bilateral cooperation.

The government added that it has resumed servicing debt under all finalized agreements, marking a return to normalized creditor relations.

Dr Musokotwane urged remaining bilateral creditors to fast-track outstanding negotiations, stressing that wrapping up the restructuring process is essential to unlocking a sustained economic recovery.

Zambia’s debt overhaul—one of the most closely watched cases under the G20 framework—is seen as crucial to the country’s long-term growth prospects and efforts to rebuild investor trust.

With the Italian deal now in place, the focus turns to sealing the remaining agreements needed to fully steady the country’s debt footing and support a more resilient economic future.