Yesterday the UK government launched the ‘London Coalition on Sustainable Sovereign Debt’ with private creditors.[1]
Reacting to the launch, Heidi Chow, Executive Director of Debt Justice, said:
“Banks, oil traders and hedge funds have boycotted debt relief processes and broken commitments around lending transparency. The UK government can take concrete action to tackle this as many of these lenders are based in the UK and their debts are usually governed by English law. Introducing a new law would compel these high-interest lenders to take part in debt relief and disclose the details of their loans.”
Participation in debt relief
Private and commercial lenders have been a block to all countries trying to negotiate debt relief in recent years:
- In Chad, the private creditor consortium led by Glencore delayed negotiations while continuing to be paid in full. This led to Chad getting virtually no debt relief, because the debt was largely paid off during the delayed negotiations.
- Ethiopia’s bondholders have refused to accept a reasonable and generous offer from the Ethiopian government and have threatened to sue in order to pressure Ethiopia to accept a weak deal.[2] The negotiations with bondholders and bilateral creditors have been held in parallel, and bilateral creditors have agreed a deal first, in March 2025.
- South Sudan has been successfully sued for $657 million by Afreximbank in the UK Courts after defaulting on high-interest loans from the profit-making lender.[3]
- In Zambia, it is two years since a deal with official creditors. While bondholders and some non-bond private creditors have agreed debt restructuring deals, other Western private creditors have still failed to reach agreements, including Standard Chartered.
- Similarly, it is 18 months since Ghana’s deal with official creditors, but no deals have yet been announced with non-bond private creditors. Some of these creditors appear to be using political pressure to try to be paid in full.[4]
- In Sri Lanka, Hamilton Reserve Bank has rejected the bondholder restructuring and is continuing to pursue a court case in New York state.
Transparency of loans
In 2019, banks, through the Institute of International Finance (IIF), agreed to disclose details of loans to lower-income country governments under the ‘Voluntary Principles for Debt Transparency’.[5] Yet in the six years since, only two banks disclosed loans, and none have been disclosed since 2022.[6] IIF member banks which have disclosed no loans include Société Générale, Standard Chartered, Deutsche Bank, Citigroup and HSBC.
Standard Chartered
The UK government has announced that outgoing Chair of Standard Chartered, José Viñals, has been appointed a co-Chair of the London Coalition. Zambia owes Standard Chartered $268 million plus claimed accrued interest since defaulting in 2020.[7] No debt relief agreement between Standard Chartered and Zambia has been announced,[8] four-and-a-half years after Zambia defaulted, two years after government creditors agreed debt relief for Zambia, and over a year since a deal with bondholders.
Standard Chartered have also failed to disclose any loans under the IIF transparency scheme. Standard Chartered is an IIF member and participated in meetings creating the transparency principles. José Viñals was on the Board of the IIF.[9] In 2023 When Debt Justice asked Standard Chartered why they had failed to disclose any loans they said: “Our participation in any transaction, or relationship with a client, remains confidential and is guided by our public Position Statements.”[10]
Notes
[1] https://questions-statements.parliament.uk/written-statements/detail/2025-06-23/hcws728
[2] See https://debtjustice.org.uk/press-release/bondholders-would-still-make-30-profit-from-rejected-ethiopia-deal and https://www.ft.com/content/40c35ffd-fa86-445f-9c4c-dc434b61de25
[5] https://www.iif.com/portals/0/Files/Principles%20for%20Debt%20Transparency.pdf
[7] https://www.mofnp.gov.zm/?page_id=3475#
[8] In March 2025 Zambia announced that it has reached debt relief agreements with several of its non-bond private creditors. Standard Chartered was not included in any announcement https://x.com/mofnpzambia/status/1902025846161887718 https://www.mofnp.gov.zm/?wpdmpro=debt-sustainability-analysis-dsa-report-march-2025#
Standard Chartered has not made any announcement about its debt restructuring negotiations with Zambia https://www.sc.com/en/media/press-releases/?year=&monthnum=&s=Zambia