Wednesday, June 19, 2024

Zambia creditors to meet soon to form debt committee

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Zambia’s creditors are in the next few weeks expected to form a committee to examine the sustainability of the nation’s debt and determine the amount of relief they are willing to offer, Finance Minister Situmbeko Musokotwane said on Friday.

“We anticipate that the official creditor committee will be formed within the next few weeks, paving the way for the restructuring discussions,” Dr. Musokotwane said in parliament.

The discussions on Zambia’s debt, at 120% of GDP, are expected to culminate in creditors providing financial assurances to the International Monetary Fund (IMF) for the approval of a $1.4 billion extended credit facility, he said.

In 2020, Zambia became the first country to default in the pandemic era, buckling under a debt burden that rose to $31.74bn at the end of 2021, 17% higher than six months earlier.

Although the committee would comprise bilateral creditors, Dr. Musokotwane said commercial creditors would also be invited to provide relief to Zambia to ensure burden-sharing.

“Everything is going according to plan,” Dr. Musokotwane said, adding that the Debt Sustainability Analysis (DSA), which forms the basis of restructuring plans, had been completed.

Musokotwane told Reuters in February that he hoped the DSA would be finished by the end of the month and that Zambia would reach an understanding with creditors in March or April, which would then pave the way for a formal IMF agreement by May.

That timeline was deemed ambitious by analysts, given that the creditor committee had not yet been formed.

Dr. Musokotwane told parliament the government was aiming for an IMF deal “by the middle of this year”.

13 COMMENTS

  1. And it begins, the IMF imperialists now controlling and deciding your fate. Disgusting upnd govt who sold us out

  2. @Kalok..I agree entirely…John Perkins describes the role of an economic hit man as follows: Economic hit men (EHMs) are highly paid professionals who cheat countries around the globe out of trillions of dollars.

  3. @Eagle’s Eye and Kaizer: So why do you guys always continue creating room for the Economic hitman to come hit you? Did the hitman force the debt on your throt? Was the hitman the ono who bought a Bel Chopper at $700000? Was the hitman the one that brought corruption to Zambia? was the hitman the who bought properties for you in Kingsland City?

  4. This UPND grz is also too slow in arresting these PF thieves ,look how arrogant they are its because they are still walking free at large. They need to be caged urgently like yesterday already.

  5. Step aside if you are so confident in your fellow tongas who are ruling then why aren’t you here in zambia? Why is your ugly tonga backside still in SA as a refugee? Come here and join us. What are you scared of?

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  6. We’re here Stup!d KZ, we are here to hold YOU and that criminal corrupt thieving incompetent PF government and its Cowardly president Edgar China Lungu to account. It was the PF government that sold us out to the Chinese, and left negative coffers!

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  7. So this issue if far from decided. Now it’s discussion of your DSA by the creditor comittee who will decide what relief they are willing to offer or not to offer at all.
    In short, the IMF loan decision will be based on these decisions.
    Quite different from the earlier posture by Musokotwane who made us believe that after the staff level agreement reached, we were just waiting for the IMF board to meet for formal approval of the loan.

  8. Ba Musokotwane, please get your records and your communication straight, we are watching you.
    Your earlier communication was that before you start negotiating with Creditors, you need the staff level agreement with IMF, you said that was the only way to bring creditors to the table. Now what I am reading (correct me if I am wrong), is that, Mr. Musokotwane said “The discussions on Zambia’s debt, at 120% of GDP, are expected to culminate in creditors providing financial assurances to the International Monetary Fund (IMF) for the approval of a $1.4 billion extended credit facility”. The other way round, so what is the truth then? ANYWAY, the path doesn’t matter, what matters is Zambia achieving the end game = $1.4 billion.

  9. This govt needs to truthful – transparent …this IMF lie has come back to haunt them because they were not truthful…I mean you have increased expenditure how are you going to balance the books? You increased tax and removed subsidies to clear these debts …why should creditors form these commitees there must be a problem somewhere. Remember those creditors didnt vote for you!!

  10. This is the third or so time that the governments of UNIP, MMD and the UPND have sought IMF assistance and there is a common reason. From 1973 up to 1987, Zambia engaged either through stand by arrangements or Extended Fund Facilities (UNIP era) or Structural Adjustment Facility Commitments and/or Extended Credit Facilities (MMD era). MMD government engaged the IMF because they inherited a beleaguered economy and now again, the UPND is doing the same because the PF left a mess of an economy. Talk about deja vu.

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