SUN BUSINESS [email protected] has appealed to its creditors to support its request for the six months debt stand still in order to give relief to the budget.
Minister of Finance Bwalya Ng’andu indicated that the stand still would give Government space to develop a long term debt restructuring strategy.
“The request for a 6 months standstill is part of our debt strategy development process. The standstill will give immediate relief on the budget and most importantly give the government time to finalize its debt sustainability analysis that will provide details of the broad asset liability management measures that are required to be implemented to deliver debt sustainability over the medium term,” he told Parliament.“The debt sustainability analysis will provide the details that are required to provide for informed engagement with the different creditors, including Eurobond holders, on the adjustment in order to attain debt sustainability over the medium to long term. This will be done with the full support of the IMF.”The Finance minister said bond holders to this effect were expected to cast a vote on Zambia’s request for a debt stand still.If Zambia fails to reach an agreement with its commercial creditors, he said, including Eurobond holders on the terms of appropriate stand still the Republic with its limited fiscal space would be unable to make payments and therefore fail to foster accumulation of the debt.He said this was why government was calling upon the bond holders to support the government’s efforts for the request for a stand still for the period of six months.“I want to emphasise the country’s desire to enter into a constructive, transparent and equitable dialogue with all our creditors as we undertake the debt restructuring process aimed at restoring debt sustainability. We had engagements with bond holder committee through our advisors and we are currently responding to questions that are being raised from the presentation of a stand still.“The government has requested all its external creditors to agree to debt service suspension on the similar terms during the stand still period, the only foreign denominated debt that Zambia will continue paying on a current basis is debt from multilateral agencies and debt from few priority projects,” he said.“Following the issuance of the consent solicitation memorandum, I made a presentation on 29 of September 2020 highlighting the rationale for our request for a standstill.“In the presentation to the Eurobond holders, I highlighted the micro economic and fiscal situation in our country including our current debt position and how it will be difficult to sustain external debt service.Dr Ng’andu, however, refuted claims by domestic and international society that government’s debt had risen to US$27 billion.The minister said the said debt incorporates the private sector who had borrowed from international creditors.
He said government’s debt was US$11.9 billion as indicated in the 2021 national budget.