Felix Chipota Mutati prefers debt restructuring as delayed payment of US$11.2 billion international liability is a disastrous decision
Nicole Richards with Favourite Jenala Kalando
By Favourite Jenala Kalando in Lusaka, Zambia
FORMER Finance Minister Felix Chipota Mutati is seeking a rapid response as the economy continue to be adversely affected by the global lockdown and poor performance of the Zambian Kwacha against international convertible currencies.
As experts and communities equally continue to dialogue over the best mode of debt restructuring, her US$11.2 billion international liability, Mr. Mutati advised Finance Minister Dr. Bwalya Ng’andu that postponing repayment schedules for 2022, 2024 and 2025 to 2027 is not a lasting solution.
Finance Minister Bwalya Ng’andu addressing Zambia in Lusaka on Wednesday 12th February 2020
Accordingly, the former Movement for Multiparty Democracy (MMD) Lunte Member of Parliament (MP) in the Northern Province recollected that in July 2005, Zambia overcame the debt burden through reaching Highly Indebted Poor Country (HIPC) economic benchmarks.
Zambia’s three former Republican President’s; 5th President, the late Michael Chilufya Sata (Left), Second President the late Dr. Frederick Titus Jacob Chiluba (Centre) and Third President, the late Dr. Levy Patrick Mwanawasa State Counsel (Right) at Libala Grounds in Lusaka on Wednesday 5th September 2001 – Picture by Derrick Sinjela – National Mirror Multimedia Zambia Limited, owned by the Christian Council of Zambia (CCZ) and Zambia Episcopal Conference (ZEC). CCZ is now called Council of Churches in Zambia run by General Secretary Reverend Canon Emmanuel Chikoya while ZEC rebranded to Zambia Conference of Catholic Bishops (ZCCB) and is under the jurisdiction of Secretary General Father Cleophas Lungu.
Noting ongoing conversation on debt restructuring and debt relief and intensity of the coronavirus and global economy of poor African countries, Mutati an accountant by profession says time has come for interventions similar to the HIPC style debt relief.
KK with Ng’andu Peter Magande
The former Commerce Trade and Industry, who served alongside then Finance and National Planning Minister, Ng’andu Peter Magande, credited for championing a debt cancelation of called for elimination and extinction of the current US$11.2 billion debt.
On July 6th 2005, Zambia became the 13th Regional Member Country (RMC) of the African Development Bank (AfDB) to reach completion point under the enhanced HIPC Initiative. Debt relief from the AfDB Group to the country since December 2000 when it reached decision point – the first stage in the HIPC process – amounts to over US$ 61 million in nominal terms.
Zambia had reached its decision point in December 2000 and qualified for US$ 2.5 billion worth of total debt relief assistance in end-1999 Net Present Value (NPV) terms1.
On April 8, 2005, Zambia became the 13th Regional Member Country (RMC) to reach the completion point under the enhanced HIPC Initiative, preceded by a Jubilee 2000 campaign spearheaded by the late Cardinal Medardo Joseph Mazombwe (24 September 1931 – 29 August 2013) was a Cardinal of the Catholic Church.
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As a result, the Boards of Directors of the IMF and the World Bank approved a total irrevocable debt relief from multilateral and bilateral creditors amounting to US$2.5 billion in end-1999 NPV terms (US$ 3.9 billion in nominal terms) for Zambia, then under the leadership of Third Republican President, the late Dr. Levy Patrick Mwanawasa.
