The Centre for Trade Policy and Development (CTPD) has implored the new dawn government not to take the Debt Service Suspension Initiative (DSSI) signed with a number of lenders as a typical debt service holiday.
CTPD Researcher Public Finance Wakumelo Mataa explains that the DSSI is not forgiveness of debt or anything similar, but merely a holiday in the repayment of the debt owed.
Mr Mataa says it’s therefore, wise to utilize such a holiday by boosting income sources while negotiating for a prolonged repayment period for other debts that may be owed.
He says this would lighten the debt burden, and enable the borrower to honour the debt obligations at the expiry of the Debt Service Suspension Initiative.
Mr Maata notes that previously, Zambia has not made use of this principle.
He says despite the initial halt in servicing interest payments on external debt, nothing much was done to boost productivity, while the debt restructuring process stalled at the backdrop of protracted discussions with the International Monetary Fund (IMF).
Mr Maata further asked government to give an update on the Zambia’s application in February 2021 for treatment under the Common Framework which also covers Chinese creditors.