Zambia and Israel have reached a US$460 million debt restructuring agreement that marks a major step in Zambia’s ongoing efforts to stabilise its economy and rebuild fiscal strength. Zambia has been working through a broad debt recovery programme after its 2020 debt default, and this agreement strengthens its path toward long-term debt sustainability. The deal restructures Zambia’s obligations to Israel and extends repayment terms up to the year 2043. It covers debt linked to development projects supported through Israel’s Foreign Trade Risks Insurance Corporation Limited, known as ASHRA, which financed activities in agriculture, defence and healthcare. Government officials have described the agreement as a key milestone in restoring confidence in Zambia’s fiscal management framework.
The agreement reflects Zambia’s wider economic reform agenda under the G20 Common Framework for Debt Treatment, which aims to coordinate debt relief and restructuring for countries facing unsustainable debt burdens. Minister of Finance and National Planning Situmbeko Musokotwane stated that the deal demonstrates progress in restoring fiscal discipline and rebuilding debt sustainability after years of financial strain. He noted that the restructuring will reduce immediate debt servicing pressure, allowing the government to redirect resources toward infrastructure development, economic recovery programmes and social sector support. The extended repayment timeline provides greater predictability for national budgeting and helps ease liquidity constraints that have limited public investment in recent years. Authorities also emphasised that transparency and prudent debt management remain central to ongoing reforms.
The agreement was reached after constructive negotiations between the two governments, with both sides highlighting the importance of cooperation throughout the process. Israeli Ambassador to Zambia Ofra Farhi welcomed the outcome and said it reflects strong relations and mutual respect between the two countries. She reaffirmed Israel’s commitment to supporting Zambia’s economic recovery and long-term stability efforts through continued engagement and partnership. The debt covered under the agreement is tied to projects implemented with support from ASHRA financing, which has played a role in key sectors such as agricultural development, healthcare systems and defence-related capacity building. The restructuring ensures that these obligations are managed in a way that aligns with Zambia’s current repayment capabilities.
The Zambian government has also committed to honouring the terms of the new agreement while maintaining constructive relationships with all creditors and development partners. Officials say the restructuring will create additional fiscal space that can be used to strengthen essential services and support inclusive growth across the economy. By extending obligations to 2043, the country gains breathing room to stabilise public finances while continuing structural reforms aimed at boosting productivity and investment. The deal also signals renewed confidence from international partners in Zambia’s recovery trajectory under the G20 Common Framework. Overall, the agreement highlights a coordinated effort between Zambia and Israel to balance financial responsibility with long-term development priorities, reinforcing the foundation for sustained economic recovery and improved fiscal resilience.