ActionAid Zambia has said that the Zambia Government re-engage Bondholders and Seek Sustainable Solutions to Debt Problems.
In a statement released to the media, ActionAid Zambia said that Zambia defaulted on its interest payments on the US$3 Billion Eurobonds as of Friday 13th November 2020 and urged government to re-engage bondholders regarding the six (6) months interest payment relief hoping that bondholders would reconsider the status quo and demonstrate a measure of humanity, and recognize the suffering that its actions will inflict on millions of Zambian women and children who are already living in poverty.
Below is the full statement
GOVERNMENT MUST RE-ENGAGE BONDHOLDERS AND SEEK SUSTAINABLE
SOLUTIONS TO OUR DEBT PROBLEM.
Zambia defaulted on its interest payments on the US$3 Billion Eurobonds as of Friday 13th November 2020. This came in the wake of bondholders rejecting government’s request for six (6) months interest payment relief.
As ActionAid Zambia, we are concerned with the latest developments on two fronts: worsening credit ratings with dwindling prospects to attract future financing and consequences/penalties arising from this default. Fitch ratings, a credit rating agency already downgraded Zambia to almost junk status after government sought to delay interest payments to bondholders in September 2020. As a developing country, Zambia needs attract sustainable foreign investment which responds to the economic needs of the country. However, with a poor credit rating this will affects investor confidence and eventually lead to capital flight. This may further weaken the economy by the possible contraction of GDP as well as currency depreciation.
We would therefore like to urge government to re-engage bondholders regarding the six (6) months interest payment relief. Our hope is that bondholders reconsider the status quo and demonstrate a measure of humanity and recognize the suffering that its actions will inflict on millions of Zambian women and children who are already living in poverty. The vulnerable Zambians are the big losers in this case, as government will further be handcuffed in providing any gender responsive public services due to the rejection by bondholders to grant Zambia a debt interest payment relief.
It is our considered view that the debt relief will be necessary to ensure that the most vulnerable Zambians do not suffer the consequences of the country’s debt mismanagement amidst Covid-19. On the other hand, the Zambian government must also genuinely seek to address some of the issues and concerns raised by bondholders such as lack of transparency regarding Chinese loans and government not having a clear strategy on public debt management. Chinese lending institutions, whether state-run or quasi-commercial, should clearly state how much they have lent to our government and the loan terms and conditions involved. The Zambian government should also be more transparent on its borrowings and finances and provide a clear strategy on public debt management which is key in assuring lenders our commitment towards debt sustainability.
More importantly, we would like to remind the government that in as much as seeking debt interest payment relief seems to be the only way to go for Zambia. It is, however, suffice to note that this is not enough. Government should explore and pursue a more sustainable path of restoring fiscal discipline, commitment to good economic governance with zero tolerance to corruption.
Nalucha Nganga Ziba
Country Director, ActionAid Zambia
Bondholders don’t difficulties to deal with Zambia, it’s Zambia that has difficulties being truthful in its engagement with the bondholders. Let me put it this way, if you owe KZ and Vincent Mwale more money than your salary then you get to KZ and ask for relief with an explanation that you’re unable to pay the full installments because you also owe VM. Then KZ asks you to tell him how much you owe VM before he can consider your request then you respond that you can’t disclose the amount. What do you expect KZ to do? If he refuses to grant you relief would you say he’s a bad person? This is the case of Zambia. Our govt isn’t being transparent because they’ve something to hide. Mufisanji amambala?
STOP borrowing, otherwise the nation will be declared bankrupt!
We are a Junk State already!
Nothing is going to happen. We just need new ideas to come and clean this mess. Believe me, we are not going anywhere with these PF guys
No , ………….
let lungu and pf carry on.
I am sure the majority of Zambians will now look into the message of a campain rally instead of considering it day out entertainment to watch dancing…..
You PF zealots were slagging me off when i told you from day one that lungu is the problem….
Now I am waiting for the dollar to hit KW30 before I make my sweet move….
Dunnuna , dunnuna ……
We don’t take these paid trumpets seriously. Go and do research into who funds some of these NGOs you will then realise their agenda. We have capable technocrats who can deal with the economy and are confident in them. In as much as I thank you for your superficial concerns nalucha, I take them with a pinch of salt. As a person you are a good friend nalucha. We always had fun when we met but we took different paths in life
Where is lazzard in all these loan negotiations, $5 million doesn’t just grow on trees.
It is better that everybody sticks to their lane, if you belong to the Lab you can’t start commenting on politics. How were you appointed to that position in the first place.
It’s funny how everyone is worried about Zambian debt when the person who borrows is quiet and planning on borrowing more to purchase a presidential jet.
Kikiki! I feel sorry for KZ, he really bangs them! Should that riff raff Bally get into Plot 1 next year? Aikona man! Uzajata ng’ombe!!!
Oh PF ,what have you done? Anyone voting for you is unpatriotic.
Lenders can only renegotiate with a new government. They cannot engage with the current one in place.
@Ayatolla, regardless Kz is still wicked
Lazzard got their money for consultancy services and gone. When you have advisors of the KZ type will now advise Zambia to sue Lazzard.
Apa, ni Visionless
KZ , you’re a dirty bum.
Pf cadre that made me laugh haha.
The principle underlying governance in a Multi Party Democratic dispensation is that the next government must better than the previous one.
Once we understand this principle, no one can bit us. Not even Britain nor USA can bit us.
So therefore, we must be tactical in the way we exercise our political power. Political power must never be used to suprise other political parties. Political power must never be used to suprise other economic institutions.
All countries exist because of economic activity response in them.
Rather it is a tool we can use to exercise are economic being and not muscle manship nor advancing inappropriate behaviours.
We must understand that the aim is to give to ourselves that economic advantage, That security we all need as a society.
What is important is…
What Bondholders what to see are the fiscal plans Zambia’s has and see how the restructuring will fit in and meet the interests of all parties you shall meet all creditors and bond holders in that without discriminations They want assurance on how those restructuring of debts will return you to fiscal sustainability if they accepted the restructuring .The specific question is how the fiscal plans relates to how GRZ will balance the repayments between private creditors and Chinese The best option though was to repay the $42 Million and avoided the unnecessary Technical default that was left at the mercy of creditors , that was unnecessary especially that some provisions could have been made in those…
those sinking funds before and towards the 24 hrs dateline repayments and especially that acceptance to reschedule became increasing difficult to cement as evident in those discussions The creditors where concerned and worried more amongst equitable treatment about the six-month repayment holiday on $3 billion of Eurobonds that would seem to have gone to favor 1 creditors interests than the others That was the worry and what simply was needed was that assurance and commitment to sustainability to eventual emerge to repay . However the fallout for Zambia like other countries that have gone through the pathway and emerged is to learn the Bad and Good points to reengage with markets and investors , to…