LUSAKA - Zambia's government hopes it can agree debt restructuring ​terms with Afreximbank, even though the matter is under arbitration, a senior Zambian finance official said on ⁠Thursday.

Zambia, which defaulted in 2020, has reached agreements with creditors for 94% of the debt it ⁠wants to ‌restructure but Felix Nkulukusa, Zambia's Secretary to the Treasury, said the government believed the remaining 6% of the debt will be done "very soon".

Zambia owes Afreximbank ⁠roughly $45 million, and $555 million to Trade Development Bank, according to think tank ODI.

"We have continued discussing (with Afreximbank), and we believe that matter can come out of arbitration and we can be able to resolve it," Nkulukusa said at an event in the ⁠capital Lusaka.

The Southern African country's difficult ​path out of debt default is ensnared in a broader dispute over whether African "baby multilaterals" must take losses ‍on their loans.

In October, Nkulukusa said a third party had expressed interest in taking on its Afreximbank debt ​as a way out of the dispute, but he did not mention that proposal on Thursday.

Ghana announced a "resolution" of its much larger $750 million loan with Afreximbank on December 25. Sources told Reuters that the Paris Club of official lenders had embraced the deal, a move that would only come if the bank took a hit on the loan.

Nkulukusa pointed to that deal as a sign of hope.

"What is encouraging is that now we have seen that in Ghana where Afreximbank has got a big exposure, that there is some agreement on ⁠how that restructuring can be done," he said on Thursday.

"In ‌Zambia, the exposure is very small, and we believe that we'll be able to achieve it."

This week, Fitch downgraded Afreximbank to junk due to a higher risk profile. It ‌also withdrew future ⁠ratings after the bank severed ties with the agency.