By Derrick Silimina
The Zambia Chamber of Commerce and Industry (ZACCI) has hailed the government for reaching an agreement in restructuring transactions relating to the bonds due in 2022, 2024, and 2027.
In a statement, ZACCI President Anthony Kabaghe said the restructuring of the Eurobond will provide crucial debt relief, with approximately $840 million in claims being foregone, and offering approximately $2.5 billion in cash flow relief through reduced debt servicing payments during the IMF Programme period.
“Consequently, this debt restructuring deal is anticipated to have a positive ripple effect on the country’s economy. As the apex body representative of the private sector, ZACCI foresees substantial implications of this debt restructuring deal in stabilizing the exchange rate. This stabilization will foster confidence in the market, cultivate a culture of predictability, and enable planned investment strategies, ultimately leading to economic growth,” Kabaghe said.
He added that the agreement will improve the country’s credit ratings on the international financial markets, making it easier and more affordable for Zambia to access external financing in the future.
Kabaghe noted that with the reduced debt servicing obligations, the government can allocate more resources to social sectors like education, healthcare, and social welfare, leading to improved living standards and quality of life for its citizens.
“However, to ensure the long-term stability of the exchange rate and sustained economic growth, the Zambia Chamber of Commerce and Industry strongly recommends that the government prioritizes transitioning the nation into an export-oriented country. By promoting value addition across various sectors, Zambia can bolster its competitive advantage on the global stage, attract increased investment, and drive economic growth.”
