‘DEBT RESTRUCTURING FEASIBLE IN FIRST QUARTER 2022’
By BUUMBA CHIMBULU
ZAMBIA’S debt can be restructured in the first quarter of 2022 if the country manages to get an International Monetary Fund (IMF) deal by end of this month.
The country’s external debt currently stands at US$14.67 billion.
Debt restructuring will ensure a smooth running of the 2022 national budget, according to Mutisunge Zulu, an Economist and Financial Analyst.
Mr Zulu warned that it would be difficult to smoothly run the 2022 national budget in the absence of debt restructuring which could only be achieved with an IMF deal in place.
He emphasised during a 2022 post budget meeting organised by PWC that the IMF deal was a precursor for successful debt restructuring.
Zambia is currently having discussions with the IMF on the country’s eligibility to access a package worth US$1.3 billion and intends to reach an agreement by the end of this month.
“Government is very ambitious to ensure that Zambia gets an IMF package by end of this month.
“If that happens, then in the first quarter, debt will be restructured and should that happen then I guess that we will have a normal budget running but in the absence of that then it will be very difficult to drive the level of growth that is needed,” Mr Zulu said.
He stated that if debt redemption was done properly, it was expected that investments flows would start and in turn spur economic activities that should support growth.
Mr Zulu also indicated that Zambia’s credit ratings which were currently in default would be adjusted once the country finalised its negotiations with the IMF.
“It may be too soon but the positive to take out of it is that once we restructure, a decision can then be made. When you restructure, your ratings will not be default anymore which is a positive step in the right direction.
“The IMF deal is a precursor for successful debt restructuring. Only will credit ratings adjust Zambia’s ratings after an IMF deal which is currently in default,” Mr Zulu said.
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