Chinese loans drive Zambia into a deep debt spiral, investigation reveals

A joint investigation by China Capital and the International Consortium of Investigative Journalists has revealed how the Industrial and Commercial Bank of China facilitated a debt trap for Zambia. Internal paperwork shows the bank provided a long-term loan to the state electricity utility, Zesco, to expand power supply across multiple provinces. This financing arrived at a time when Zambia’s economy was booming thanks to high commodity prices and strong Chinese demand for metals.

Seeking investors for large-scale projects such as highways, stadiums and airports, the Zambian government turned to Chinese credit, which the report says was structured to favor Beijing’s strategic goals. The resulting debt accumulation has left Zambia heavily indebted to China, raising concerns about the country’s fiscal sustainability.