Saturday, March 2, 2024

Some light at the end of the tunnel in Zambia’s debt restructuring process -CSO Debt alliance


The Civil Society Organizations (CSO) Debt Alliance is elated at the announcements by the International Monetary Fund (IMF) Managing Director, Kristalina Georgieva, and the World Bank Group President, David Malpass, that the Official Creditor Committee for Zambia has provided the financial assurances necessary for the IMF Executive Board’s approval of a Fund supported program. This implies that chances are high that the Fund program for Zambia may be in place by September this year as envisaged, in time for the 2023 fiscal year.This is contained in a press statement issued by Mr.Wakumelo Mataa,CSO Debt Alliance Coordinator

Since August 2021, the new dawn government has been demonstrating a renewed resolve to restore fiscal fitness and re-institute debt sustainability. By December 2021, Zambia secured a Staff Level Agreement (SLA) with the IMF as a prelude to an Extended Credit Facility Program (ECF). It is gratifying that these noble efforts have bared fruits as the country prepares itself for the debt restructuring process.

Zambia is among countries that were severely affected by the COVID-19 pandemic, which combined with pre-existing debt challenges to drive the economy into a recession in 2020. By November of the same year, government officially requested a debt treatment under the Common Framework supported by the Group of 20 major economies and the Paris Club which, unfortunately, proved elusive ever since. Despite benefiting from an earlier initiative, the Debt Service Suspension Initiative, Zambia’s debt challenges have remained evident to date as manifested in fiscal constraints that have forced the government to cancel and rescope ongoing projects to curtail debt accumulation.

The CSO Alliance on debt management has welcomed the UPND government’s decision to cancel some loan-financed projects and rescope
others as part of measures to address current debt challenges beyond the debt restructuring process. This is key towards retaining debt to a sustainable path. The CSO Debt Alliance looks forward to formally engaging with both the government of Zambia and the
International Monetary Fund once the Fund program is approved and relevant policy documents are made public to ensure a smooth debt restructuring process as this is key to steer a steady and resilient economic turnaround, and revelation of the conditionalities of the

The CSO Alliance on Debt Management was established in September 2020, created to provide oversight and policy engagement leadership on Public Finance Management. The alliance is housed at the Centre for Trade Policy and Development (CTPD)
Fund Programme for Zambia, will make it easy for the CSOs to monitor the implementation of the programme in order to ensure transparency and accountability.

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