$5MN Debt Restructuring Fee Should Go To Women, Youth Empowerment - HH

UPND leader Hakainde Hichilema is the latest to offer his services to the Government for free in connection with debt restructuring.

Earlier this week the Government announced that it plans to appoint French firm Lazard Freres for advisory services relating to liability management of its debt portfolio.

According to a statement issued by Secretary to the Treasury Fredson Yamba Lazard Freres was selected from a list of six bidders and the contract will be worth a maximum of US$5 million for work done over a period of three years.

However, Mr Hichilema has called on Government to instead give the US$5 million to youth and women empowerment programmes, offering his support in the restructuring of the debt.

Mr Hichilema has stressed the importance of a debt restructuring exercise, but noted that for it to be successful it must be rapidly executed and provide sufficient relief which is contingent on taking steps to immediately restore debt sustainability and rebuild the collapsed economy.

The UPND leader also noted the importance of building confidence among creditors and citizens alike.

“Any debt restructuring must be underwritten by the strong political will to stay the course and implement a sound economic program as a guarantee that the exercise will be of mutual benefit to both borrowers and lenders in the longer term,” he counsels.

In February of this year Minister of Finance Bwalya Ng'andu confirmed that external debt stock continues to rise and now stands at US$11.2 billion. The debt has increased almost 6-fold from just US$1.9 billion in 2011.  Among the debts are the Eurobonds, which will see around US$750 million debt mature in 2022, followed by US$1 billion in 2024 and US$1.25 billion between 2025 and 2027.

Domestic arrears stood at K26.2 billion in September 2019 and concern remains regarding Zambia’s high levels of debt, which reached 80% of GDP by the end of 2019 as compared with 35% in 2014.

Organizations such as the African Development Bank have warned that the country is at high risk of debt distress and the Economics Association of Zambia President Lubinda Haabazoka has previously warned that servicing the debt would cost around US$800 million in 2019.