- He also said to ensure that the country does not fall into a crisis, Government should pay the $42.5 million coupon defaulted on to unlock the support needed from the bondholders, as the country embark on the more critical negotiations to restructure its debt.
By OLIVER SAMBOKO
THERE is need for the country to immediately engage the IMF and request for a staff programme, as a basis to embark on the journey to earn credibility, creditworthiness, and a path to fully-fledged support, UPND President Hakainde Hichilema has said.
Mr Hichilema posted on his official Facebook page, this will provide the needed assurance to the creditors and potential investors of the country’s commitment to a coherent recovery programme which focuses on rebuilding creditworthiness.
He also said to ensure that the country does not fall into a crisis, Government should pay the $42.5 million coupon defaulted on to unlock the support needed from the bondholders, as the country embark on the more critical negotiations to restructure its debt.
Mr Hichilema said failure by the country to meet its obligation to the bondholder should be avoided at all cost, as it puts the country at risk of holdout creditors taking legal action to seize the sovereign assets.
He said already some creditors have embarked on a process to determine a possible payout to holders of default insurance, which may trigger a chain of collection of payouts that could lead to the recall of the loans in full.
“This basically means that business entities will now have to pay upfront for all imports. The access to cheap sovereign financing is severely diminished, and potential investors will now adopt a cautious approach to investing in the country,” he said.
The UPND leader called for the revision of the 2021 budget so that it can respond to the current situation as it is the tool through which the country manages its public finances.
He also said the current debt situation requires cutting all wasteful expenditures, such as slush funds, bogus expenditures on harmful and sub-standard goods and services, huge emoluments spent on politicians’ lifestyle, including the presidential jet.
“There will also be a need to reprioritize expenditures, by allocating freed-up resources towards growth enhancing expenditure lines,” he suggested.