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What is the origin of Zambia's debt and what are the links between Zambia's debt and apartheid?
At independence in 1964, Zambia inherited a few assets and liabilities from the colonial regime. It inherited a vibrant mining sector, the largest industrial base in Sub-Saharan Africa, but with only a handful (about 100) of university graduates, very limited infrastructure and a £97 million (in current U.S. dollars, that figure is $195,341,267.68) external debt. Zambia therefore began borrowing to cover the social economic requirements as well as to protect itself from hostile colonial domination in Southern Africa, especially the apartheid regime of South Africa.  

Therefore, external debt began to climb from £97 million in 1964 to $155 million the following year to $1,353 billion in 1975 to $7.1 billion by 1991 — a figure it only reached again in 2004 (see chart below) and currently (December 2006) estimated at K1.5 billion after HIPC and MDRI relief. It is important to note that by 1999, of Zambia's $6.5 billion external debt, over 90 per cent was due to apartheid related causes.

Zambia’s rise in external debt is mainly on account of the following reasons:

1. Balance of payment problems of the 1970s due to falling copper prices and rising oil prices. “Over $ 840 million was amassed in the period between 1970 to 1980 to offset this.
2.  Zambia's solidarity with countries in liberation struggles such as Zimbabwe, South Africa, Angola, Namibia and Mozambique. This engagement in liberation struggles accounts for over 90 percent of Zambia’s debt in 1999 and it is referred to as apartheid debt.
3. The need to find alternative trade routes to answer to the dilemmas of a landlocked country surrounded by nine countries, five of which were embattled in liberation struggles.
4. Zambia’s self-declared moratorium against austere conditionalities and policies of the IMF and instead opting for home grown policies under the theme "Growth from Own Resources" in1987 to 1989. During this time arrears and penalties amounted to over $3 billion while debt stock to GDP ratio rose to over 200 percent and the debt service to exports ratio rose to over 50 percent.

Zambia has borrowed from Multilateral, bilateral and commercial creditors.  Multilateral Financial institutions like the World Bank, IMF and the African Development Bank have been Zambia's major creditors accounting for over 50 percent with 2006 figures being estimated at over half a billion dollars.

What was Zambia's experience under HIPC?
Zambia entered the HIPC decision point in 2000 after having followed the prescriptions of the IMF and World Bank under the Enhanced Structural Adjustment Facility of the IMF. Zambia joined the HIPC program with promises of abiding to the policy conditionalities stipulated in the HIPC Decision point document, which highlighted the need for a Poverty Reduction Strategy Paper (PRSP) prepared in a participatory way and strict adherence to the Poverty Reduction and Growth Facility (PRGF) of the IMF.