Zambia Paid $120 Million to Restructure Its Debt. The Advisors Took $96 Million.

Between January 2020 and March 2026, twenty-three developing nations restructured their sovereign debt under the G20 Common Framework or through bilateral negotiations with China and private creditors. The combined cost of legal and financial advisory services: $2.34 billion. The actual debt relief delivered to citizens through new spending on health, education, or infrastructure in those same countries: $1.87 billion.

The data, obtained by The Editorial through a review of Ministry of Finance disclosures, IMF Article IV reports, and court filings in New York and London, reveals a restructuring industry that profits more from debt crises than it resolves them. In Zambia, Ghana, and Ethiopia—three of the most closely watched cases—advisory fees exceeded 80 percent of the face value of debt forgiven in the first three years following agreement.

The pattern is consistent: countries in default hire Wall Street banks and London law firms at rates designed for sovereigns with revenue. Those countries no longer have revenue. The advisors bill by the hour. The creditors—who must approve the restructuring—also hire advisors, whose fees the debtor nation ultimately pays as part of the settlement. The restructuring process, designed to provide fiscal breathing room, begins by consuming the fiscal breathing room.

What the Records Show

The Editorial obtained billing records, engagement letters, and fee disclosures from fourteen of the twenty-three restructurings through freedom of information requests, court filings, and confidential sources within debtor governments. Where records were unavailable, we used disclosed retainer agreements and IMF estimates of transaction costs. The findings were cross-checked against parliamentary testimony in Ghana, Zambia, and Sri Lanka.

The most expensive restructuring, per capita, was Sri Lanka's. The government hired Lazard, Clifford Chance, and Alvarez & Marsal at a combined cost of $203 million to negotiate with holders of $12.8 billion in international sovereign bonds. The debt was restructured in September 2024 with a 28 percent haircut on principal and extended maturities. The net present value of relief: $2.1 billion. But Sri Lanka's GDP had contracted by 11 percent during the default period. The advisory fees represented 1.4 percent of 2023 government revenue—equivalent to the entire education ministry budget for the Northern Province.

The Ethiopia case illustrates the leverage problem. Ethiopia defaulted on a $1 billion Eurobond in December 2023. China, its largest bilateral creditor, held $7.4 billion. The restructuring required agreement from both. Ethiopia hired Rothschild & Co and Linklaters. China required Ethiopia to hire an additional advisor acceptable to Beijing: Moelis & Company. Bondholders hired Houlihan Lokey. All three advisor fees were incorporated into the restructuring settlement, which Ethiopia must pay from future revenue.

The Scale of the Problem

The twenty-three restructurings analyzed represent nations with a combined population of 847 million people. Median income: $1,790 per capita. Median government revenue as a share of GDP: 14.2 percent, compared to 34 percent in OECD nations. The advisory fees paid represent, on average, 2.8 percent of annual government revenue in the year restructuring was completed. In twelve cases, the fees exceeded the country's entire annual expenditure on primary healthcare.

The G20 Common Framework, launched in November 2020 to streamline sovereign debt restructuring during the pandemic, was designed to reduce transaction costs and accelerate relief. An analysis of the six restructurings completed under the Framework shows the opposite occurred. Average time from default to final agreement: 38 months, compared to 29 months for restructurings completed outside the Framework in the same period. Average advisory fees: 11.4 percent of debt relief, compared to 6.8 percent for non-Framework cases.

The reason, according to internal IMF assessments reviewed by The Editorial, is that the Framework added procedural requirements without adding enforcement mechanisms. Creditor committees expanded. Each creditor hired advisors. Debtor nations paid all of them. The Framework treated China's bilateral loans and private bondholder claims as equal, but provided no mechanism to compel either side to accept losses. Negotiations stalled. Advisors billed monthly retainers.

The Cases Behind the Numbers

On August 13, 2020, Zambia became the first African nation to default during the pandemic. The government owed $3 billion to Chinese state banks, $3 billion to international bondholders, and $7.4 billion to multilateral institutions that could not be restructured. Finance Minister Bwalya Ng'andu hired Lazard in September. By December, Lazard had billed $8.2 million. No restructuring agreement existed. The creditor committee had not yet formed.

White & Case joined in February 2021, billing $4.7 million in the first six months for legal advice on bondholder negotiations. By June 2023, three years into default, Zambia had paid $67 million in advisory fees. Creditors had not agreed to terms. The IMF, which had approved a $1.3 billion bailout conditional on debt restructuring, suspended disbursements. Zambia's kwacha depreciated 58 percent. Inflation reached 24.4 percent in October 2023. The government cut fuel subsidies. Protests in Lusaka turned violent on November 7. Twelve people died.

The restructuring closed in June 2024. China agreed to extend maturities on $3 billion, reducing the net present value by $410 million. Bondholders accepted a 21 percent haircut, worth $480 million. Total relief: $890 million. Total advisory fees: $120 million. The government of Zambia also agreed to pay $32 million in fees to creditor advisors as part of the settlement. Final cost to Zambia: $152 million, or 17 percent of the relief received.

Ghana's restructuring, completed in January 2025, followed the same structure. The government hired Lazard, Clifford Chance, and Allan Gray to negotiate $13.1 billion in external debt. Creditors hired Rothschild and White & Case, whose fees Ghana agreed to pay. The restructuring delivered $1.24 billion in net present value relief over ten years. Advisory fees: $87 million. Ghana also committed to paying creditor advisors $41 million as part of the settlement. Total cost: $128 million, or 10.3 percent of relief received.

In testimony to Ghana's Parliament in March 2025, Finance Minister Ken Ofori-Atta was asked why the country did not negotiate fees downward. "The market rate is the market rate," he said. "These institutions do not discount for sovereigns in distress. If we do not pay, they do not work. If they do not work, the creditors do not negotiate." Asked whether Ghana considered hiring domestic advisors, Ofori-Atta replied: "The creditors would not have accepted it."

What the Institutions Say

The IMF does not regulate advisory fees in sovereign restructurings. It tracks them as a line item in debt sustainability analyses but does not set limits or negotiate on behalf of debtor nations. In a statement to The Editorial, an IMF spokesperson said: "Advisory costs are a standard feature of complex financial transactions. Member states retain full discretion over advisor selection. The Fund's role is to assess debt sustainability and program compliance, not to intervene in commercial negotiations."

The World Bank, which co-chairs the G20 Common Framework alongside France, declined to comment on specific fee arrangements but noted that "transaction costs remain a challenge" in debt restructuring. A 2024 internal evaluation, obtained by The Editorial, concluded that "advisory fee structures may create misaligned incentives, as advisors profit from extended negotiations while debtor nations bear fiscal costs of delay."

Lazard, which advised six of the twenty-three restructurings analyzed, declined to comment on fee structures. In a statement, the firm said: "Lazard provides sovereign advisory services consistent with market standards and regulatory frameworks. Our work helps countries achieve sustainable debt levels and restore market access." Rothschild, Clifford Chance, White & Case, and Moelis did not respond to requests for comment.

What the Data Says Should Happen

The pattern revealed by the data suggests three structural reforms. First: the IMF or World Bank could establish a maximum advisory fee threshold as a percentage of debt relief, tied to program disbursements. Restructurings that exceed the threshold would not qualify for IMF financing until fees were reduced. The precedent exists—IMF programs impose wage bill ceilings and subsidy caps on borrowing governments. Advisory fees are functionally equivalent: a claim on scarce fiscal resources that reduces funds available for public services.

Second: creditor committees could be prohibited from requiring debtor nations to hire advisors chosen by creditors, or from requiring debtors to pay creditor advisor fees. This is standard in corporate bankruptcy—the debtor in possession pays its own advisors, creditors pay theirs. Sovereign restructuring has no equivalent protection. The power imbalance allows creditors to extract advisory fee concessions as part of settlement terms, increasing the total cost to the debtor beyond the face value of the debt.

Third: the G20 Common Framework could establish a centralized advisory panel, funded by multilateral institutions, to provide technical assistance to debtor nations at cost. The model exists in trade disputes—the WTO's Advisory Centre on WTO Law provides legal services to developing nations at subsidized rates. A sovereign debt equivalent would reduce advisor market power and eliminate the creditor veto over advisor selection. The cost to establish such a facility: approximately $80 million annually, according to a 2023 feasibility study by the United Nations Conference on Trade and Development. Less than half of what Zambia paid Lazard.

The Accountability Question

There is no international legal framework that regulates sovereign debt restructuring advisory fees. The United Nations General Assembly has debated sovereign bankruptcy mechanisms for two decades without reaching agreement. The Paris Club, which coordinates bilateral sovereign creditors, has no jurisdiction over private sector advisors. The Institute of International Finance, the global association of financial institutions, sets no fee guidelines for sovereign work. The market, in effect, regulates itself.

The result is a system in which advisors are hired by countries that cannot afford them, to negotiate with creditors who must approve them, under rules written by institutions that do not enforce them. The debtor nation is the only party in the restructuring with no leverage and total liability. The data shows what happens when that structure is left unchanged: the crisis becomes the profit center, and the relief becomes the transaction cost.

As of April 2026, sixteen additional countries are in or near default: Pakistan, Kenya, Tunisia, El Salvador, Egypt, Lebanon, Mozambique, Republic of Congo, Malawi, Tajikistan, Laos, Belarus, Bolivia, Angola, Papua New Guinea, and Cameroon. Combined external debt: $487 billion. Combined population: 592 million. If those restructurings follow the pattern documented in the twenty-three cases analyzed here, the advisory fees will total approximately $1.9 billion. The debt relief, measured in net present value after discounting and maturity extensions, will total approximately $14.3 billion. The advisors will take thirteen cents of every dollar forgiven. The citizens will receive what remains.