NEGOTIATE FOR EXTENSION OF BONDS MATURITY, GOVT URGED
By BUUMBA CHIMBULU
GOVERNMENT should utilise the current positive goodwill from the international lenders and creditors to negotiate and move the maturity dates for the current debt stock which is almost US$14 billion.
It is critical for Government to have maturity dates for principal payments moved forward for some of the debt which are almost due, according to an economist, Dr Austine Mwaange.
On September 20, 2022, Zambia’s first Eurobond will mature.
The government will be required to settle its principal payment amounting to US$750 million in full.
Dr Mwaange explained in an interview yesterday that Government should also ride on the goodwill from the international community to reschedule and accelerate efforts to restructure debt.
“In debt rescheduling, we expect that even certain payments can be reduced or suspended for this period when we are coming from Covid-19 and we need to support human development. If this does not happen, most of the Zambians will be affected,” he said.
Dr Mwaange also urged Government to implement strict austerity measures while it still had the support of the people and the international community in an effort to reach acceptable debt sustainable levels.
He explained that economic theory indicated that a Government could only get support from the people for austerity measures immediately after winning an election. He recalled that Zambians had in the past supported two Presidents under serious austerity measures, an indication that they could still do it.
Dr Mwaange however cautioned Government should guide the nation on how they were going to adjust the economic programme left by the previous regime
“It will be good for the people to buy into austerity measures if they are explained to positively where the money went and show how it was utilisedso that we reach debt sustainable levels acceptable by the international financial institutions. We can only reach these sustainable levels if we tighten our belts.
“We need the macroeconomics restored and attain fiscal and debt sustainability. Once we do that we will restore economic growth and diversification of the economy,” Dr Mwaange said.
