IT should not come as a surprise that bondholders have rejected Zambia’s request for a six-month grace period over the country’s debt. Of course this has put more pressure on how the country will sustain its debt.
The rejection was expected after Zambia missed payment of US$42.5 million coupon on one of its dollar denominated sovereign bonds last month and the grace period ended yesterday.
The country has US$3 billion of Eurobonds outstanding and owes US$2 billion to commercial banks, US$2 billion to the International Monetary Fund and World Bank and another US$3 billion to China.
But Zambians should not despair that all is lost. There is still light at the end of the tunnel if the country unites and tackle the crippling foreign debt with one accord.
This is the time that we need to take stake of our mineral wealth as we have often stated, particularly of the newly discovered gold fields and other rare minerals in demand.
Zambians must not wallow in self-pity but take courage that Government has not thrown in the towel altogether.
They should get encouragement from the response on the decision of the bondholders by Finance Minister, Bwalya Ng’andu who regretted that there was no approval.
“While Government regrets that the bondholders did not approve the requests made by Zambia in good faith, we remain committed to finding a consensual and collaborative resolution to debt sustainability issues,” Dr Ng’andu said in a statement yesterday.
Dr Ng’andu however said Zambia would continue to engage in constructive dialogue and share information with the ad hoc committee of bondholders and all other creditors.
He said this was in light of the fiscal and economic challenges the country faced, that Zambia remained resolute to adhere to the principle of transparency in its engagements with the creditors.
The refusal to grant Zambia a grace period even though a bitter pill to swallow should also propel Zambians to find home-grown solutions to economic prosperity.
When Bank of Zambia Governor Christopher Mvunga over a month ago assumed office after being ratified by Parliament, we wrote to him and made several suggestions on how the country’s economy could be bolstered.
“We are aware that you are taking charge of the central bank at a time when the country is facing a myriad of problems arising from the global Covid-19 pandemic.
“This has resulted in the country’s reduced foreign exchange earnings and disrupted debt repayment efforts which has in fact cheered doomsayers who want to see the Zambian economy fail.
But we have no doubt that you take up your position with a fresh approach as to what needs to be done to improve the country’s economic fortunes.
For our part, we would suggest that one of your first tasks should be to draw up some sort of “Marshall Plan” to boost the country’s foreign exchange earnings.
This Marshall Plan must encompass mining of the newly discovered reserves of precious stones and agriculture. The defence wings have all taken up agriculture seriously, with the Zambia National Service being the most promising.
The country is blessed with many minerals that if properly harnessed could change the face of the nation.
In this instance, we need to ensure that we take charge of the God-given minerals, particularly gold which has been discovered in various parts of the country.
Gold mining must be organised in such a way that there is order in the manner it is organised as opposed to the current arrangement in which illegal miners – mostly foreign – are reaping huge rewards.
We note that Government has in the past announced plans to set up hubs throughout the country in which small-scale miners can mine the gold and other precious minerals and sell in an organised manner.
The artisanal miners, properly organised and supported with mechanised tools could provide the bulk of the gold to the ZCCM-IH for processing before being sold to the central bank.”
We still feel this is the way to go, let’s take mining seriously, particularly of gold as well as agriculture. Food security is one step closer to ending foreign exchange problems for excess produce could be exported.
What is required now is collective effort and not name-calling or resorting to the blame-game. Now is the time to work.
TIME TO WORK
