LOCAL FIRMS HAVE NO CAPACITY TO RESTRUCTURE DEBT - EAZ

ZAMBIAN firms have no capacity to undertake debt restructure because it is a complex process which needs highly competent firms, says the Economic Association of Zambia (EAZ).

And an economist Statistician has said Zambia needs a skilled financial adviser such as Lazard Freres Gestion with experience in dealing with other financial institutions who may be the holders of the country’s Eurobonds to restructure its US$11.2 billion external debt.

For bondholders to agree to new terms of debt, a country needs a financial adviser with clout and experience in dealing with other financial institutions who may be the holders of Zambia’s Eurobonds, says Shebo Nalishebo, an Economic Statistician.

Zambia has hired Lazard Lazard Freres Gestion of France for US$5 million to restructure its US$11bn foreign debt over a three-year period, a 0.05 percent of the entire foreign debt portfolio.

Meanwhile, EAZ National Secretary, Mutusunge Zulu, said there was no local firm competent enough to handle the debt restructuring.

Mr Zulu said the foreign firm, Lazard, was the best option to carry out the assignment because it was competent enough and had a lot of experience.

He said in an interview yesterday that Lazard had done debt restructuring for developed economies such as Argentina and Greece as well as African countries like Mozambique.

Meanwhile, Patriotic Front Media Director Sunday Chanda said opposition parties were ignorant on many issues, including the government's decision to restructure the national debt.

And Mr Nalishebo explained that Zambia had no local firm which had the needed experience to assist in restructuring the country’s debt.

“I could be wrong, but I do not know of any Zambian financial advisory firm or political party with a track record as Lazard’s to be able to pull off this kind of debt restructuring,” he said in his comment on the debate regarding the hiring of Lazard.