ZACCI Applauds Gov’t’s Landmark Debt Restructuring Agreement

The Zambia Chamber of Commerce and Industry (ZACCI) has extended its heartfelt congratulations to the Government of the Republic of Zambia and the Steering Committee of the Ad Hoc Creditor Committee for reaching a significant agreement. 

The deal, focused on restructuring the Government’s bonds due in 2022, 2024, and 2027, marks a critical milestone in the nation’s financial landscape.

Mr. Anthony Kabaghe, President of the Zambia Chamber of Commerce & Industry, emphasized the landmark nature of the agreement, noting its potential to shape Zambia’s development trajectory positively. 

The restructuring of the Eurobond is set to provide essential debt relief, with approximately $840 million in claims foregone and an estimated US$2.5 billion in cash flow relief through reduced debt servicing payments during the IMF Programme period. These measures are anticipated to have a substantial and favorable impact on the country’s economy.

Highlighting the implications for market stability, Mr. Kabaghe underscored ZACCI’s anticipation of the deal’s role in stabilizing the exchange rate. This stabilization, he suggested, would instill confidence in the market, foster predictability, and enable strategic investment initiatives, ultimately fostering economic growth.

Moreover, the agreement is expected to enhance Zambia’s credit ratings on international financial markets, facilitating easier access to external financing in the future. 

With reduced debt servicing obligations, the Zambian government is poised to allocate more resources to critical social sectors such as education, healthcare, and social welfare, ultimately improving living standards for citizens.

However, Mr. Kabaghe stressed the importance of long-term stability and sustained economic growth, recommending that the government prioritize transitioning the nation into an export-oriented economy. 

By promoting value addition across various sectors, Zambia can enhance its competitive advantage globally, attract increased investment, and drive economic expansion.

In conclusion, Mr. Kabaghe reiterated the potential of the successful debt restructuring to usher in significant positive changes for Zambia’s economy and overall development trajectory. 

He emphasized the need for effective management of freed-up fiscal space, sustainable economic policies, and a focus on export-oriented growth to ensure long-term stability and prosperity for the nation.