Bulgaria’s Finance Minister, Simeon Djankov, and his Zambian counterpart, Situmbeko Mosokotwane, signed an agreement waiving USD 6.3 M or 77% of Zambian debt, which has not been serviced in the past 20 years.
The agreement was signed in Sofia, Bulgaria Wednesday where Musokotwane is.
The USD 6.3 M will be used as development aid, according to Bulgarian media.
The remainder of Zambia‘s debt – a total of USD1.886 M will be paid in four installments within one year, the Sofia-based cabinet said in February, when the decision for the debt remission was taken.
Should the Zambian government fail to fulfill its obligation under the agreement, it will be obliged to pay the debt in full in one installment in the framework of sixty days.
Zambia‘s USD 8.2 M debt piled up during the communist regime in Bulgaria, which collapsed in 1989, in return for arms, construction of roads and factories and technical aid.
During the years of the communist regime the debts of countries from the so called “Third World” to Bulgaria were kept secret.
When they were revealed to the public, it turned out that the international financial institutions have already drawn up a plan for them to be waived.