Zambia is on the verge of defaulting on its foreign debt as it missed a $40m payment last month.

With the grace period coming to an end on Friday, should Zambia default, it would be Africa’s first country to default on sovereign debt since the coronavirus crisis.

Zambia was already struggling with its $12bn external debt load, BBC reports.

However, the Covid pandemic has heightened pre-existing financial pressures in Zambia, increasing the burden on health services and hampering economic activity.

Zambia has requested interest payments to be postponed until next April, but this has not as yet been agreed by creditors.

According to Sarah-Jayne Clifton, director of the UK-based Jubilee Debt Campaign, which is calling for debt relief for the world's poorest countries, creditors lent funds to Zambia at high interest rates, aware that the debt would likely become too big.

She told Reuters: "That risk has now materialised, and bondholders must now accept a significant debt write-down.

"It is simply immoral for bondholders to demand full repayment and to make huge profits on Zambia's debt while the country struggles with Covid-19, a major economic crisis and spiralling poverty levels," she added.

However, bondholders have as yet not shown support for a delay.

Eurobond holders have indicated that Zambia has not progressed in talks with the International Monetary Fund, whilst an apparent lack of transparency in the country’s borrowing from China has also been quoted as a reason.

With Zambia not the only country in Africa to struggle with mounting international debt, other governments will be keeping a close eye on how borrowers and creditors deal with the issue.