Zambia’s government has agreed to a revised deal to restructure more than $3.5bn (£2.7bn) of its international bonds with private investors.

Under the agreement, creditors will forego $840m in claims and Zambia will continue with an ongoing $2.5bn IMF cash flow relief programme.

The deal follows months of tensions between China and other creditors over the proposed terms of the agreement.

Zambia had borrowed billions of dollars after the Covid pandemic to cushion the economy.

President Hakainde Hichilema has hailed the deal as “a historic milestone”.

It’s an important step in the country’s effort to restructure its debt after defaulting in 2020.

Monday’s development follows a series of delays that had made Zambia a symbol of the failure of a G20 initiative for faster solutions to debt crises in poorer countries.

The initiative, known as the G20 Common Framework, was launched in 2020 to provide relief to low-income countries dealing with huge debt.

The implementation of the deal would make Zambia the first country to achieve debt restructuring under the G20 framework.

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