Welcome to Foreign Policy’s Africa Brief.

The highlights this week: Zambia agrees to a debt-for-energy swap, U.S. forces withdraw from Nigeria after a joint offensive against the Islamic State, and Morocco’s Atlas Lions carry the hopes of the continent at the World Cup.

Welcome to Foreign Policy’s Africa Brief.

The highlights this week: Zambia agrees to a debt-for-energy swap, U.S. forces withdraw from Nigeria after a joint offensive against the Islamic State, and Morocco’s Atlas Lions carry the hopes of the continent at the World Cup.

Zambia’s Innovative Debt Relief

Zambia launched the world’s first debt-for-energy swap last month, offering to buy back $1.36 billion of its outstanding 2053 private bonds using a $600 million concessional loan from the African Development Bank. The Zambian government is covering the remaining cost.

A recent surge in copper prices has strengthened Zambia’s economy. In exchange for clearing the debt, the Zambian government agreed to spend its $275 million in interest savings on power networks over 15 years.

So-called debt-for-development deals are not new. The Seychelles implemented the world’s first swap to fund marine conservation in 2015. In 2023, Ecuador conducted the largest-ever debt-for-nature swap aimed at protecting the Galápagos Islands. Last year, Kenya entered into a $1 billion debt-for-food swap with the U.S. International Development Finance Corporation.

But most environmental projects don’t tangibly boost an economy. Zambia’s debt swap is the first one targeting grid electricity that drives GDP growth. Grid electricity is the biggest factor holding back African productivity and industrialization. Around half of Zambia’s population lacks electricity.

“Unreliable supply, losses in the distribution network, and limited access in underserved areas are not merely technical problems; they undermine growth, they deter investment, and, most critically, they diminish the quality of life of Zambian citizens,” said Zambian Treasury Secretary Felix Nkulukusa in a June 24 announcement outlining the debt swap.

It’s significant that Zambia’s energy swap has been backed by an African bank, said Trevor Lwere, an economist at Development Reimagined, a consultancy based in China, Kenya, and the United Kingdom. “It signals that these African finance institutions understand the development needs of African countries.”

But Lwere cautioned that the swap is not enough to significantly reduce Zambia’s overall debt-servicing burden. “Debt-for-development swaps are not silver bullets,” he said.

In 2021, Zambia became the second country to enter the G-20’s Common Framework, which is designed to help developing nations unify debt negotiations among traditional Western creditors, non-Paris Club creditors such as China, and private lenders. Zambia was the first country on the continent to........

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