‘We’ll pay what we owe’

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Lusaka - Zambia remains committed to paying its international debt obligations despite present financial incapacity to do so, and the country requires breathing room to restructure its dues, Treasury Secretary Mr Fredson Yamba has said.

Zambia has a combined domestic and external debt in the region of US$18 billion, with around US$3 billion arising from a Eurobond issue.

The government is negotiating for a reprieve under the G20 Debt Service Suspension Initiative (DSSI), and it hopes to secure similar concessions from commercial creditors. 

In a recent statement, Mr Yamba said Zambia presently lacked financial capacity to meet obligations.

Mr Yamba said the government wanted to “normalise the relationship with valued financial partners as soon as circumstances allow to orderly address Zambia’s debt challenges. Zambia remains committed to ensuring far treatment for all its creditors and ensures there is transparency in its engagements´.

On September 29, Finance Minister Dr Bwalya Ng’andu informed creditors of Zambia’s inability to meet its debt service obligations, including the likely failure to US$120 million in interest. He sought a six-month extension to April 2021.

Last week he told the Expanded Budget Committee of Parliament that, “They (creditors) raised the issues of transparency, saying that Zambia was not being transparent enough… These are what I would call the real issues and also paying debts.”

He also said Zambia had been borrowing to service debts, insisting that “debt does finance debt”.

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