Chamber of commerce hopes Zambia’s deal with Eurobond holders will unlock resources for development

The private sector anticipates that Zambia’s agreement with its international Eurobond holders on debt restructuring promises to unlock substantial resources for the country’s developmental agenda.

The agreement would see the three existing bonds restructured into two new amortizing bonds maturing in 2035 and 2053 respectively, under a “base case” scenario.

The proposed restructuring included a US$700 million write-off and US$2.5 billion in cash flow relief during the period of Zambia’s US$1.3 billion, 38-month International Monetary Fund (IMF) programme, which was approved in September 2022.

Commenting on the development, the Zambia Chamber of Commerce and Industry (ZACCI) stated that this landmark agreement sets the stage for similar restructuring agreements with our other private creditors.

Read more: Zambia reaches Eurobond restructuring agreement, maturity pushed to 2035, 2053

In a statement issued by its secretariat on Friday, ZACCI indicated that this development marked a significant step forward in the ongoing Zambia debt restructuring process, promising to unlock substantial resources for our nation’s developmental agenda.

“We look forward to a swift implementation of this agreement in principle by the year’s end. Our profound gratitude goes to all our creditors for their unwavering support and collaborative efforts that have brought us to this pivotal juncture.

“From a private sector perspective, the implications of these developments are profoundly positive. We anticipate a reduction of government reliance on domestic credit lines, which will in turn avert crowding out the private sector,” ZACCI stated.

“Furthermore, the renewed interest from non-residents in treasury bills and the injection of resources to stabilize exchange rates will create a conducive environment for business operations.

“This, in turn, is anticipated to increase the availability of credit lines, thereby opening doors for private sector investments aimed at expanding existing industrial output, improving production processes, and establishing new projects and ventures,” ZACCI stated.

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