The Economics Association of Zambia has said that it is encouraged that the Zambian government has joined other countries in implementing measures aimed at cushioning the negative economic effects of covid 19 among which is debt management.
In a statement released to the media following news that the Zambian Government is seeking the suspension of debt repayment for 6 months, EAZ said that the current solicitation to suspend coupon payments is part of the debt management strategy Zambia has embarked on with the help of Lazard and should not be treated as a default.
The Association further said that the public solicitation is part of the procedure any bond issuer has to go through in such circumstances, adding that should the bondholders refuse to suspend coupon payments, the Zambian government will still trade business as usual.
Below is the full statement
GRZ consent Solicitation to suspend coupon payments due 14th October 2020
The Economics Association of Zambia is encouraged that the Zambian government has joined other countries in implementing measures aimed at cushioning the negative economic effects of covid 19 among which is debt management.
Earlier this year when our analysis had forecasted stress for economies around the world especially for emerging markets like ours, we called upon the Zambian government to immediately engage its global partners in the aim of suspending certain multilateral debt payments and negotiating for easing down conditions especially on commercial debt as practiced by similar countries.
As an Association, we were delighted to see the Zambian government appoint Lazard Freres as financial advisor to help restructure its external debt as the practice is around the world for countries with bonds actively trading on the international capital markets.
The move was positively received by the market.
We would like to assure the markets and citizens that the current solicitation to suspend coupon payments is part of the debt management strategy Zambia has embarked on with the help of Lazard and should not be treated as a default. The public solicitation is part of the procedure any bond issuer has to go through in such circumstances. Should the bond holders refuse to suspend coupon payments, the Zambian government will still trade business as usual.
We would also like to advise the public that in August 2020, the Zambian government applied for the G20 debt service suspension initiative and is also requesting for similar debt service suspension from its commercial creditors.
Zambia is not the only emerging market undergoing the same procedure.
We would like to advise the Zambian government to continue being transparent about the debt situation and remedies that are being implemented to ensure that debt remains sustainable despite the harsh global economic environment.
We also call upon the general public to take keen interest in what is happening around debt management in Zambia but not to be speculative as issues to do with commercial debt or bond markets are highly sensitive to market information.
As an Association, we shall engage the Minister of Finance in a public discussion to discuss among other things the 2021 budget and debt management.
For any queries, contact the EAZ secretariat in Lusaka.
Issued by:
Lubinda Haabazoka, PhD
EAZ President, on behalf of the Board
Lusaka, Zambia
DOOMSTERS AND UNPATRIOTIC UPND SUPPORTERS ARE GNASHING THEIR TEETH AT THIS STATEMENT.
ZAMBIA HAS NO CHOICE BUT TO POSPONE DEBT INTEREST PAYMENTS BECAUSE COPPER PRODUCTION AND COMMODITY PRICES HAVE PLUMMETED DURING THE PANDEMIC.
AND hh IS NOT THE SOLUTION TO THE PROBLEM AND WE KNOW WHY!
DOOMSTERS AND UNPATRIOTIC UPND SUPPORTERS ARE GNASHING THEIR TEETH AT THIS STATEMENT.
ZAMBIA HAS NO CHOICE BUT TO POSPONE DEBT INTEREST PAYMENTS BECAUSE COPPER PRODUCTION AND COMMODITY PRICES HAVE PLUMMETED DURING THE PANDEMIC.
AND hh IS NOT THE SOLUTION TO THE PROBLEM AND WE KNOW WHY!!
Russian economist barks again hoping that his master will avail few crumbs
Excellent and morally upright view from a patriotic citizen. Hh is even using his European gay friends to talk negatively about our debt on some unheard of foreign programmes. You will still lose in 2021 ******
I like this man coz he is real economist not those with fake papers.Russians guys are good bcz in Russia there are no fake theories but practical issues when learning. These European have brain washed Zambians by always saying UK so IMF sooooo but russians and chinese are real guys. Let us change our education system.Lubinda you’re my man.If those economists we have were like you Zambia would have developed by now.This is reason they like saying Russina economist forgeting that Russia is very smart country with intelligent people.It’s made up with a lot of jews.China learns from russia.
Real economist not those with fake qualifications. Well done my Russian friend. Let us show them how to run a country thru practicals
Debt payments can be suspended, but interest on debt does not stop accumulating even when allowed to suspend payment. The unpaid interest will be another bill to contend with later. You may be dribbling yourself.
Pay the bond. Zambia defaulting is now major headlines in all financial circles as well as financial media. Together with Angola we have been named as the first defaulters and the laughing stock of Africa.