Monday, February 26, 2024

Zambia’s MOU with Official Creditors Sets Path for Economic Development

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The signing of a Memorandum of Understanding (MOU) between Zambia and its official creditors marks a significant milestone in Zambia’s efforts to address its debt crisis. The Center for Trade Policy and Development (CTPD) believes that this agreement will pave the way for increased resources to be allocated to development projects, thus benefiting the nation’s economic growth.

Isaac Mwaipopo, the Executive Director of CTPD, emphasized the positive impact of the MOU on Zambia’s quest to alleviate its debt burden. He noted that this development will enable the government to allocate more resources to areas in need of development. In the past, a substantial portion of the government’s budget was directed toward servicing the national debt annually.

Mwaipopo’s comments come in light of International Monetary Fund (IMF) Managing Director Kristalina Georgieva’s praise for Zambia’s agreement with official creditors. Georgieva has described the MOU as great news and extended her congratulations to the Zambian government for reaching this crucial milestone.

Zambia and its official creditors reached an agreement on a comprehensive debt treatment in June 2023. The MOU formalizes this agreement and represents an important step toward ensuring long-term debt sustainability. The co-chairs of Zambia’s Official Creditor Committee are China and France, with South Africa serving as Vice-Chair.

With the signing of the MOU, each official creditor will initiate their internal processes to formalize the agreement. Subsequently, the terms outlined in the MOU will be implemented through bilateral agreements with each member of the Official Creditor Committee.

The Ministry of Finance and National Planning in Zambia is optimistic that the formalization of the Official Creditor Committee agreement will further support the country’s ongoing efforts to secure a comparable agreement with its private creditors, ultimately resolving the debt overhang.

The signing of this MOU is seen as a positive step forward in Zambia’s path toward achieving long-term financial stability and fostering economic development.

Regenerate

8 COMMENTS

  1. Dollar K22 now, how and why?

    But yet we are seeing investment come in, just today I saw an abnormal load carried on a truck and trailer of a dump bucket used in the mines, this thing was very huge and I’m told they cost over 1 million dollars, and each day so many of this equipment comes in, now what kind of nonsense is this when these mines say they’re investing money into Zambia they buy the equipment from abroad, use it here and when it is old they scrap it. No value addition at all for Zambia, no USD used in Zambia all of it externalized.

    Solution, all investment above $5million must be deposited into BOZ and withdrawn from there. Limit the power of commercial banks and we will solve the high demand for USD in Zambia.

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  2. @kci, everyday you can see this mine equipment being delivered as abnormal loads, these machines are headed mainly to North Western province where we now have some of the largest open pit mines in the world.
    FDI in form of liquid USD and not machinery should first be deposited in the bank of Zambia and not commercial banks. If First Quantum or KCM etc make a deposit of $2 billion in BOZ how that can help the economy and not their silly games of ati we are investing but go and buy machinery from abroad with no real benefit to Zambia apart from taxes which they even dodge, they keep cheating us this way. When you say you are investing deposit the money in the central bank bwana so that the country as a whole sees your real investment.

  3. The only development people want is affordable essential commodities.
    Some Upnd chairman was justifying the expensive fuel telling crowd that fuel only benefited a few privileged individuals… he forgot that fuel prices affect each and everyone of the 20million Zambians directly or indirectly. But the chap was adamantly convinced that he was telling us facts.

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