Economy

Next Africa: Zambia Could Default and Others Follow

The depth of devastation brought by the coronavirus to fragile African economies is becoming clear.

Zambia is seeking to delay $120 million in interest payments on its Eurobonds for six months — an effective default. Chad asked to postpone debt repayments to Glencore and other private creditors. Kenya said it is at risk of debt distress and Angola sought to calm anxious investors, with its secretary for finance insisting the country will honor its obligations.

 

Zambia, the first to approach the precipice, paid the price, with its securities falling to almost half their face value. The countries have something in common.

 

The coronavirus has slashed the price of the commodities they export — oil from Angola and copper from Zambia — and slowed economic activity. And they came into the crisis vulnerable. All had borrowed heavily, as have many African countries over the past decade, and were in a poor state to cope with an economic shock.

 

They aren’t alone. More than a third of African countries are either in debt distress or are approaching it, the International Monetary Fund said. Even economic stars like Ghana, which has boasted consistently impressive economic growth, borrowed heavily and now spends half of its revenue servicing debt.

 

 

 

(Credit: Bloomberg)

8 Comments

  1. HaHa 😂

    We’re not only in debt crisis but also in mismanagement crisis by pf govt; Corruption, stealing, violence and whatever bad has come from pf

  2. Dorfrlyn Sojin

    If Zambia was to be well managed,there would be BO need of borrowing. Zambia, as country on it’s own,its rich. Most of goods importrd,are from Zambia going out as raw materials. Poor management of by the government. Plus selfishness of the leaders. They don’t like to see a Zambian running a progressive business. The idea of rising high taxes to unsure that,Zambian should not go any fur. They give opportunities to forghrainers. Thus is the reason why Movement for National Democracy is coming up with better mabagement system. With public interest. Not personal interest.

  3. Razor

    Even if there was no covid you would have steal defaulted. All the eurobond was stolen so you have nothing to show for it and no money to pay back.

  4. JMS

    Do we have economist in Zambia because lubinda Habazoka as pronouced may reduce to investors and increase locally now killing local people. For Zambia to survival we need a president who is an economist, we have had a teacher, lawyer who did part of the job,a unionist who changed the country but still unless Jesus was betrayed, denied and crucified now we need a real man, not these mare men you see warering trucksuits.

  5. Lovemore

    Covid or no Covid, I think Zambia was going to be where we are today.
    We started sinking way before Covid emerged.
    Covid just put the last nail into the coffin.

    • Yesai

      You’re right@Lovemore, even if there was no covid19 Zambia would still have collapsed bcoz of pf’s failures

  6. JO BREAKER

    Why are the so called none partisan (UPND) so so popular on shosho meter? But in reality, they are Lukashya and Mwansabombwe losers by a land slide. So here they are hagain blaming the PF for covid 19 the had borders closed for trade, iye sure, these people without a manifesto+ running mate from a certain region in Zambia… Kuwayawayafye

    I’m breaker I’m transcendent, I’m far and beyond and I approve this message

  7. peter

    For Zambia to survival we need a president who is an economist, we have had a teacher, lawyer who did part of the job,a unionist who changed the country but still unless Jesus was betrayed, denied and crucified now we need a real man, not these mare men you see warering trucksuits.
    Read more at thi cong noi that tai ha noi

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