Debt restructuring not an immediate cure to Zambia’s problems - Musokotwane
ZAMBIA’s current economic problems shall not immediately vanish following the government’s agreement with Eurobond holders which is expected to result into debt restructuring, Situmbeko Musokotwane has cautioned.
And Dr Musokotwane, the Minister of Finance and National Planning has said the immediate resultant effect of the US$3.5 billion agreement with Eurobond holders is to prevent Zambia’s economy from plunging into a worse situation than what it would otherwise be in the absence of debt restructuring.
Dr Musokotwane has also counselled Zambians to critically analyze the people they vote into office or the country would continue to suffer humiliation by going back to debt default settings.
Dr Musokotwane was honest to state that the agreement with the Eurobond holders did not mean that Zambia’s current economic problems would immediately vanish.
He said government would now spend a lot of time promoting transactions, stating that economic growth was not like magic.
He explained that with the reached agreement with Eurobond holders, government would be able to maintain the current status of the economy because instead of paying US$4.9 billion, which is half of the country’s budget to service the debt, Zambia will be paying $400 million, which was an affordable repayment plan. The Minister said that Zambia’s three Eurobonds had been consolidated into two which would be issued as Bond A and B.
He revealed that the first bond which was about US$1.7 billion would be payable up to 2033 with a lower interest rate and the second bond about US$1.35 billion reaches its maturity in 2053.
Dr Musokotwane said this when he appeared on the Sunday Interview programme on the national broadcaster, ZNBC television.
“By restructuring the debt, it means that we normalize our relationship with creditors, while at the same time we are able to do things for our people such as hiring teachers and nurses.”
“This just gives us an opportunity to reorganise ourselves. In the sense that without worrying that we are going to spend half of our budget to service the debt. That level has gone down significantly. And therefore we can do stuff for our citizens, like sending children to school,” he said.
Dr Musokotwane said Zambia has a history of sarcastically borrowing and want to dodge the debt after it matures.
He said it was humiliating that just few years ago that the MMD government resolved the debt issue under HIPIC left by the UNIP government, Zambia was again going to the outside world to restructure the debt.