The government of Zambia has failed to repay a US$25.7mn court-awarded debt owed to trade finance fund Barak Fund SPC, the company’s management has said.
Zambia’s High Court ruled in August 2024 that the government was liable to pay the sum, which stems from the supply of fertiliser to a state-owned entity some 10 years ago, according to a judgment seen by GTR.
Barak and the Zambian government have been in talks over the obligation since the ruling, a spokesperson for the fund said. Most recently, Barak set a March 31 deadline for payment, but it was not met and the amount remains outstanding.
The Zambian finance ministry and the civil servant leading the talks with Barak did not respond to questions from GTR about the matter.
The dispute arose from financing provided by Mauritius-based Barak to Zambian company Neria’s Investments, from 2015 onwards, to source fertiliser, according to the judgment. Neria’s then sold the fertiliser to state-owned firm Nitrogen Chemicals of Zambia.
Under a separate agreement between the two parties, Neria’s assigned to Barak the receivable owed by the Zambian government in relation to the supply contracts.
But despite what the judge called the “clear as day” assignment, the government paid the sum directly to Neria’s, instead of to Barak. The fund said it has not received the money from either Neria’s or the state.
The Zambian government did not participate in the proceedings and Barak said the authorities have not contested the debt.
Zambia entered a protracted debt restructuring at the end of 2020 after defaulting on a bond payment.
Ratings agency Fitch upgraded Zambia to B- late last year, noting the country had restructured 94% of its US$13.3bn debt pile. But Fitch said there were US$889mn worth of “claims that still need to be restructured”, chiefly supplier credits and loans from multilateral lenders.
The country exited an IMF programme in January this year after making what the organisation said was “substantial progress in restoring macroeconomic stability”.
The Barak Structured Trade Finance Segregated Portfolio is in the process of being wound down along with Barak’s other funds.
Barak’s website notes the company’s “various activities are in the process of being wound down and any positive commercial activities have been superseded by Alteia Fund Management Ltd”.
Neria’s could not be reached for comment.
In late 2022, Zambia’s anti-corruption body recorded “warn and caution” statements for four directors of Neria’s, local media reported.
The law enforcement body had accused the company of failing to deliver fertiliser after being paid US$131.1mn under supply contracts. The status of the case could not be determined.
