Opinion

OPINION | ZAMBIA NOT ALONE IN DEBT DISTRESS

Lusaka ~ Sat, 26 Sept 2020

By Editor

It’s been almost a year since the COVID-19 pandemic hit the world, throwing global economies into disarray. Borders closed, flights suspended, major companies closed, copper prices tumbled, trade was simply disturbed in a very big way – in short, many economies got some good beating and many almost ceased to function.

The worst affected by this situation are African countries like Zambia, whose largest share of revenues are dependent on copper exports and other non-traditional products that cross the borders. Their small economies are now being made to balance up between fighting COVID-19, managing key sectors of the economy while at the same time meeting foreign debt obligations, using the same limited resources that dwindled even further due to reduced revenues. For Zambia specifically, this has put a huge strain on the Treasury, with leaders having to go through painful, sleepless nights about how the balancing act will be implemented while the debt obligations are staring right in Zambia’s eyes. The only option is to seek suspension of interest payments of the Eurobond, to restrategise payments.

Reality is that the gravity of the damage that the Coronavirus pandemic has caused on fragile African economies is quite humongous and getting clear by the day. It’s not a problem for Zambia alone – Angola, Chad, Ghana and Kenya, among others, are facing similar challenges.

Chad has asked to postpone debt repayments to Glencore and other private creditors while Kenya, a country whose economy is seen to be more advanced than Zambia’s, is also at risk of debt distress.

Let’s talk about Angola, a rich in oil! It is equally facing debt distress but has assured that it will honor its obligations. Ghana, on the other hand, is spending about half of its resources paying back debts, a situation worsened by the Coronavirus.

What we must not ignore is the fact that most African countries are heavily reliant on natural resources but the Coronavirus has slashed prices of the commodities they export to the global market. For example, oil from Angola and copper from Zambia have seen slowed economic activity.

International Monetary Fund data shows that more than a third of African countries are either in debt distress or are approaching it. This is the situation we’re in right now. It’s not a problem of Zambia alone – many countries are in debt distress and debt cancellation will be the only guaranteed way of saving struggling economies from total collapse.

16 Comments

  1. Banja

    Of course not! It’s how we got into debt and how much benefitted unscrupulous individuals in government that separates us from others! Others got into debt by buying firetendets at USD 250 000 each. We paid USD 1 million for the sane if not worse. That is the critical difference!

    • X4

      Bt dnt foget tht thea is a gentle man hu has an upper hand in plunderin our economy,he enriched himslf after takin part in privatizin our mines.as u drop a coment bear tht in mind

      • Ukwimi John

        Remember that the economy had improved after the mines were sold by the man in question during the mwanawasa. Could the selling of the mines be all to blame for this retardation?

      • PSNyirongo

        You are talking about 30 years ago. Let’s be serious and come to the present

  2. JMS

    It makes a real man create a space through what he is going through and he does it clearly but a silly Man will tell her wife not to worry because everyone has the same problem now when the wife asks why some are okay in other things he tries by all means even the woman may be beaten why comparering isn’t a good motive just work hard because you maybe asked why some countries have progressed in eg buildings, good highway ect what answer will you give? Learn to work queitly through good management. We have an advantage in everything you may mention but handling is a problem.

  3. Kingfred N. Kapomba

    And we have disgruntled opposition leaders misleadimg the nation that Zambia is the only country that is Asking for a suspension of paying interest to the Eurobond.
    Telling lies gains the nation should be criminalised.

  4. Lovemore

    Talking about other Countries msg not solve Zambia’s Economic blues.
    If you read Kenyan , Ghanaian, Angolan etc News ; there is nowhere they make reference to Zambia as being in similar situation and enjoy the comfort.
    Only a very weak mind would find solace in a neighbour equal situation.

  5. Lovemore

    Talking about other Countries may not solve Zambia’s Economic blues.
    If you read Kenyan , Ghanaian, Angolan etc News ; there is nowhere they make reference to Zambia as being in similar situation and enjoy the comfort.
    Only a very weak mind would find solace in a neighbour equal situation.

  6. JMS

    Kingfred is a nuesance simler to Chris phiri and the others. Speak without thinking.

  7. JMS

    Kingfred, tell the nation why and how you have planned to engage prisoners as voters? What benefit will the nation gate? And what lesson are you teaching your children?

  8. Razor

    Zambia not alone in debt distress but zambia is the only one who has defaulted.

  9. WolvesPounce

    This is the reason I stopped coming to Zambia reports because there news is no longer that news.

  10. PAOLO

    BOSS,DON’T LOOK AT YOUR FRIENDS DEBT.GUIDE US ON HOW ZAMBIA WILL FIGHT THIS DEBT.WERE U NOT FORE WARNED ABOUT DOING THINGS HEADLESS BAMWAKOLE? ADADA,U ARE IN TROUBLE. THE PROBLEM WITH U ECL IS U HAVE BEEN BLINDED BY POWER. U ARE A PRETENDER.SORT,IT OUT THIS DEBT ISSUE KAILI.U WANT TO BE A STARLING.U HAVE FAILED ZAMBIA ALOT.

  11. PAOLO

    INSTEAD OF FIGHTING HH AND HIS FRIENDS.U AHVE DESTROYED ZAMBIA WAY BEYOND RECOGNITION.

  12. Ba mwankole

    Only a foolish father can tell his family that our neighbors has got no food so we I the same situation with them instead of making plans on how u will control the economy but you are busy comparing to others, shame on you sir

Comments are closed.