With the current trending news around debt restructuring process which started in June this year, Zambia has finally reached a logical conclusion.
The debt talks took a record time of over 18 month with protracted discussions.
With this development, Zambia was projected to record exponential growth in the medium to long term, considering the intensity of the country’s debt portfolio.
As the nation went on the bandwagon to contract debts in varying dimensions of loan instruments, eurobonds have so far been considered as one of the most toxic financial resources.
We could have used better financing options such as non concessional loans but considering the nature of the loans that were obtained through the capital market on commercial basis with market conditions terms, as various stakeholders hold to these financial instruments for the purpose of making serious investment returns.
With the upbeats in efforts towards taking Zambia up on a path-line of anchoring sustainable debt contraction methods, with substantial support put in policy framework accompanied with buffering elements such as the annual borrowing plans and parliamentary pass out models could see the country achieve its growth aspirations.
As per International Monetary Fund (IMF) prescription, Zambia’s future debt treatment capacity was expected to sit just below 50 percent of the total Gross Domestic Product (GDP) profile.
This was a clear testament being proposed in the 2024 budget where we are seeing a reduction of 33 percent in loan repayments in the projected national budget, leaving space for critical expenditures attaining to government functions.
However, the overall debt agreements that have so far been considered from bilateral, and now with the bondholders signified a total commitment towards unlocking Zambia’s economic potentials which would then make us to see an influx of strategic and productive investments in core key sectors of the local economy.
Moreover, the strong policy drive as advanced by the current regime and a clear debt management road map put in place would see Zambia achieve sustained economic growth.
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