President Hakainde Hichilema has called on Zambians to continue supporting his government in its quest to reconstruct the economy and address the people’s most pressing development needs.
Speaking at State House following the government’s announcement of the debt restructuring pact of $3.5 billion global bonds with international private creditors after more than two years of delayed negotiations, President Hichilema said his government was walking the talk to fulfill its campaign promises.
The debt restructuring of the dollar bonds comes on the heels of another milestone in which the government announced the long-anticipated resuscitation of mining operations at Mopani Copper Mines Plc with a new UAE equity partner, International Resources Holding, further reigniting hope for the mining industry.
“Our flagship campaign promise was to rebuild the economy, to take it from the bottom where it was and grow it. This opportunity is now available. I thank the people of Zambia for the patience and now ask them to continue supporting this government.”
The conclusion of the debt servicing deal is expected to pave way for wide and targeted economic reforms which the Hichilema administration has been struggling to jump start due to heavy debt overhang.
President Hichilema said relief from the restructured repayments to bond holders would trigger growth opportunities. He said government would now be able to free resources initially targeted towards debt servicing and direct a good portion of them to developmental needs.
President Hichilema said the country’s economy had been severely constricted with choking debt in a “python-like grip”.
“Today we’ve been able to sign off on what we call the Zambia debt restructuring. This means a lot, it means we now have some relief. We have unwrapped this python and we can now breathe”.
Since 2017, the Zambian government has been trying to negotiate its sovereign debt obligations during which time the country ended up defaulting on its repayment in November 2020, making it the first African country to default on foreign debt servicing during the global Covid-19 pandemic.
Hichilema took over the helm of government in a dramatic landslide election victory in 2021, inheriting a stifling foreign debt burden from the previous administration.
Multilateral financiers, the World Bank and International Monetary Fund, who supported the government’s debt repayment negotiations with the international bond holders, applauded the agreement and congratulated the Zambian authorities.
IMF Managing Director Kristalina Georgieva described the repayment restructuring agreement as pivotal and hailed it as an important achievement under the G20 Common Framework.
“Once implemented, it will deliver significant debt relief for Zambia,” Georgieva said in a statement on X.
World Bank country representative Nathan Belete described the agreement as a victory for Zambia and from which important lessons had been learned.
“We would seriously like to congratulate you, your government and the people of Zambia for crossing this very important milestone,” Belete informed Mr Hichilema at State House.
Belete said the agreement with the external creditors should serve as an example of how the world should respond to countries with challenges like Zambia.
“We recognize the actions you’ve taken on your side to show your commitment to reform and to macro economic stability,” Belete said.
British High Commissioner to Zambia, Nicholas Woolley, said the agreement on restructuring Zambia’s international bonds was a positive outcome. “It’s a major achievement for Zambia and for the G20 Common framework debt process,” Woolley said.
By John Mulenga
Kalemba March 27, 2024
