The Zambia Chamber of Commerce and Industry (ZACCI) has expressed its overwhelming support for the recent breakthrough in Zambia’s debt restructuring process.
In a press release issued today by ZACCI Secretariat, the organization commended the Government of the Republic of Zambia and the Steering Committee of the Ad Hoc Creditor Committee for achieving an “agreement in principle” on the key commercial terms of the proposed debt restructuring transaction. The deal focuses on the Government’s bonds maturing in 2022, 2024, and 2027.
ZACCI sees this development as a significant step towards enhancing the country’s economic stability and creating opportunities for growth.
The debt restructuring agreement promises to provide substantial financial relief for Zambia, with around $700 million in claims permanently waived and approximately $2.5 billion in cash flow relief through reduced debt servicing payments during the IMF Program period.
This landmark agreement paves the way for potential restructuring agreements with other private creditors, heralding an optimistic outlook for the Zambian economy.
The business community in Zambia is excited about the implications of this agreement, particularly the reduced reliance of the government on domestic credit lines. This shift is expected to prevent crowding out the private sector and stimulate economic growth.
With the potential for moderated interest rates and increased private sector investment, ZACCI foresees the expansion of existing production lines and the creation of new job opportunities.
Additionally, the renewed interest from non-residents in treasury bills and the injection of resources to stabilize exchange rates are expected to create a favorable environment for businesses.
ZACCI’s President highlighted the positive impact of these developments on the exchange rate and market confidence. “This agreement fosters stability of the exchange rate and instills confidence in the market, fostering a culture of predictability and planned investment strategies. Sustaining exchange rate stability remains a priority for ensuring long-term economic stability,” the President stated.
In a statement it has been noted that ZACCI remains committed to supporting and promoting the interests of the business community in Zambia. The organization is eagerly anticipating the positive outcomes that will result from the agreement in principle on the key commercial terms of the proposed debt restructuring transaction.