Zambia defaulted on its sovereign debt in November 2020, the first African country to do so in the pandemic era. It did not reach a final agreement covering the full scope of its external debt until years later, a restructuring process so protracted that a generation of Zambian schoolchildren entered and nearly finished primary school under the fiscal austerity the delay imposed. The commentary at each stalled milestone described the process in the language of bureaucratic misfortune: negotiations dragging, committees failing to align, technical disagreements over comparability of treatment. That framing treats the delay as an accident of complexity. It is closer to the truth to say the delay is what the architecture is built to permit, and permitting it serves some of the parties at the table rather better than it serves Zambia.
A Framework With No Clock
The G20 Common Framework for Debt Treatments, created in 2020 as the international system’s answer to a wave of pandemic-era African and low-income-country defaults, requires that a debtor country’s official bilateral creditors, a group that for Zambia meant China, France, and a dozen smaller lenders, agree collectively on restructuring terms before private bondholders are asked to match that treatment under a principle called comparability. The logic sounds fair: no creditor class should get a better deal than another. In practice, the framework specifies no binding timeline for that official creditor committee to reach agreement, no enforcement mechanism if a major creditor slow-walks the process, and no penalty for delay borne by the creditors themselves. The debtor country, meanwhile, continues servicing what debt it can, continues facing IMF programme conditions premised on a restructuring not yet finalised, and continues absorbing the fiscal consequences of limbo in real time.
Every year that Zambia’s restructuring remained unresolved, the country operated under an IMF-backed austerity programme calibrated to a debt relief outcome that had not yet materialised, while still making some payments and forgoing new financing that a completed deal would have unlocked. The absence of a clock in the framework does not distribute cost evenly among the parties negotiating around it. It concentrates cost on the one party that cannot walk away from the table.
The absence of a clock in the framework does not distribute cost evenly among the parties. It concentrates cost on the one party that cannot walk away from the table.
Who Benefits From No Deadline
Follow the incentives of each creditor class and the delay stops looking accidental. China, Zambia’s largest bilateral creditor, has structural reasons to negotiate cautiously: agreeing to terms for Zambia sets a precedent for the dozen-plus other African and developing-economy borrowers carrying comparable Chinese debt, and Beijing has consistently preferred bilateral, case-by-case negotiation over frameworks that bind its hand in advance. Private bondholders, represented by ad hoc committees with no obligation to accept a haircut proposed by others, have every financial incentive to hold out for terms closer to full repayment, since a bondholder who agrees early to steep losses. In comparison, a slower negotiator who secures better terms has cost itself money. Delay is not a cost either major creditor class bears in the way Zambia bears it. For some participants, delay is a negotiating position with no expiry date attached.
The Symmetric Account
Zambia’s own government is not merely a victim of an external mechanism it had no hand in shaping. The country’s debt accumulation in the decade before default reflected domestic borrowing decisions, including substantial non-concessional loans taken on favourable-seeming terms during a commodity boom that did not last, and successive governments delayed seeking restructuring even as debt sustainability indicators deteriorated, hoping growth or copper prices would resolve the problem without the political cost of admitting default. The framework’s design flaws do not erase the reality that Zambia’s negotiating position going into the process was weaker than it needed to be, because the debt itself had been allowed to accumulate past the point of easy resolution. The Common Framework’s slowness is a structural failure. The debt that made Zambia dependent on the framework in the first place was, in significant part, a choice.
What the Zambia case has established, and what Ghana’s and Ethiopia’s parallel Common Framework negotiations have since confirmed, is that the mechanism as currently designed will keep producing multi-year limbo for any country that enters it, because nothing in its structure penalises the creditors whose delay produces that limbo. The G20 has floated timeline reforms since Zambia’s ordeal became a cautionary case study cited at every subsequent debt conference; none has yet been adopted with binding force. Until a deadline exists that costs creditors something for missing it, the Common Framework will keep functioning less as an emergency-response mechanism and more as a waiting room where the debtor pays rent for every year spent inside it.
