The US Treasury Secretary is urging for a quick solution to Zambia and Ghana debt problems

• US Treasury Secretary is pushing for concrete steps to speed up the debt relief process for Ghana and Zambia.
• Zambia and Ghana have already defaulted on their foreign debt and are negotiating debt restructuring with creditors. 
• Yellen currently has no formal meetings scheduled with China.

Treasury Secretary Janet Yellen will press for a speedy resolution of Zambia and Ghana’s requests for sovereign debt restructuring this week, the Treasury said on Monday.

Yellen, who is scheduled to meet with counterparts from around the world at this week’s World Bank and International Monetary Fund (IMF) meetings, is also pushing for concrete steps to speed up and make the overall debt relief process more predictable, according to Treasury Undersecretary Jay Shambaugh, as seen in a report from the American news agency Reuters.

“During the week, Secretary Yellen will … maintain urgency for the speedy resolution of Common Framework cases like Zambia and Ghana to remove debt overhangs and foster growth in developing countries,” Treasury said in a statement.

Zambia and Ghana have already defaulted on their foreign debt and are negotiating debt restructuring with creditors. Although 60% of low-income nations are in or near economic crisis, the Group of 20 (G20) common framework established to assist low-income countries has failed to provide immediate debt relief.

“At a broad level, we’re really just pushing to improve the speed and predictability of this framework,” Shambaugh said at an event hosted by the Brookings Institution think tank. “This will require constructive and timely participation of all creditors in international debt restructuring discussions.”

According to Shambaugh, Treasury’s immediate priority is to resolve pending requests from Zambia, Ghana, and Ethiopia under the G20 framework, as well as from Sri Lanka, which is working on a separate debt plan due to its middle-income status.

He said Washington was pushing for “consolidated action” on Zambia’s debt treatment and creating a creditor committee for Ghana within the next month, and that the world’s two greatest economies, the United States and China, needed to work together on these issues.

Yellen will meet with officials from the G20 and the Global Sovereign Debt Roundtable, which comprises debtor nations, separately on Wednesday to discuss the debt issue, according to the Treasury.

The official expressed hope that the debt roundtable discussion would result in “actual accomplishments.” “What we’re looking for are concrete steps that will make the process operate faster and in a more transparent way.”

According to sources familiar with the situation, the co-chairs of the roundtable – the IMF, the World Bank, and India as the current G20 president – planned to publish a statement following Wednesday’s meeting.

Yellen has no formal meetings scheduled with Chinese colleagues, but a US source said officials from the Biden administration and China will continue to communicate “when we’re able to.”