CSO DEBT ALLIANCE WELCOMES THE COMPLETION OF ZAMBIA`S DEBT SUSTAINABILITY ANALYSIS
Alex Muyebe
Tuesday, 10TH MAY 2022 PRESS STATEMENT
CSO DEBT ALLIANCE WELCOMES THE COMPLETION OF ZAMBIA`S DEBT SUSTAINABILITY ANALYSIS
The unsustainability of Zambia’s public debt has remained an unsettling fiscal challenge over the past years. Calls to restructure the debt and set the economy on a path towards sustainable growth have been voluminous among stakeholders, most of which have underscored the inevitable need for debt relief. While the December 2021 conclusion of a Staff Level Agreement (SLA) between Government and the International Monetary Fund (IMF) ignited a great deal of optimism towards a formal IMF program, uncertainties characterizing its aftermath have been sedative to the high expectations and hopes that came with the SLA. The Civil Society Organizations (CSO Debt Alliance) is thus thrilled with news coming out of Washington DC, pointing to the conclusion of a joint Debt Sustainability Analysis (DSA) for Zambia as conducted by the International Monetary Fund and the World Bank.
The DSA forms a significant prelude to the debt restructuring process that will, in a broad sense, pave way for the rebuilding of the economy which Zambia desperately but evidently needs to embark on. However, the Alliance is perturbed about the purported delays in the formation of the official creditor committee which should bring together Zambia’s creditors with the view to assessing the amount of relief that they are willing and are able to offer. Particularly, we noted with great concern, media reports that one creditor was delaying this process. It is evidently clear that China, which has lent heavily to African resource exporters including Zambia in recent decades, will play a key role in the debt overhaul. With Zambia owing more than $6 billion, or 40% of its total publicly guaranteed and non-guaranteed external debt to Chinese lenders, it is critical that the Government of the Republic of Zambia
The CSO Alliance on Debt Management was established in September 2020, created to provide oversight and policy engagement leadership on Public Finance Management.
(GRZ) unlocks the puzzle to manage its relationship with the Chinese authorities and any other creditors who have potential to delay this process.
Ultimately, it is imperative that Government doubles its effort aimed at consolidating all the support that this process requires from all key stakeholders including the general citizenry. We cannot overemphasize the dire need for transparency and consistent engagement throughout this process. In this spirit, we call upon the International Monetary Fund, the World Bank and/or the Government of the Republic of Zambia to consider a swift publication of the recently concluded Debt Sustainability Analysis (DSA) as this is key in informing policy discourse on the estimated extent of the problem and prescription of the needed relief not only among creditors but the general citizenry too who are the primary subject of any economic reforms consequent to this process.
ISSUED BY:
Fr. Alex Muyebe
Chairperson
Civil Society Organisations Debt Alliance
The CSO Alliance on Debt Management was established in September 2020, created to provide oversight and policy engagement leadership on Public Finance Management.
