Gov’t Clarifies Debt Restructuring Progress, Reaffirms 94 Percent Achievement

The Government has reaffirmed that 94 percent of Zambia’s eligible external debt has been successfully restructured, following recent claims by Ms. Mulenga Kapwepwe suggesting otherwise.

Speaking during a media briefing in Lusaka, Minister of Finance and National Planning, Dr Situmbeko Musokotwane, clarified the process and progress of the country’s debt restructuring efforts, describing Ms. Kapwepwe’s assertions as misleading and based on a misunderstanding of the technical stages involved.

Dr Musokotwane explained that the restructuring process began with an Agreement in Principle reached with Official Creditors in October 2023, which was later formalised into a Memorandum of Understanding (MoU) covering 94 percent of Zambia’s eligible debt.

“In this MoU, creditors collectively committed to the agreed financial terms. This means that the creditors agreed to restructure Zambia’s debt and committed to apply the financial terms outlined,” he said.

He further stated that while bilateral agreements are still being finalised with some individual creditor nations, these are procedural steps that follow the MoU and do not alter the substance of the agreement.

“So far, bilateral agreements have been concluded with India, Saudi Arabia, France, and China, covering 57 percent of the debt at that level,” he added.

The Minister emphasised that the remaining bilateral agreements are at various stages of domestic processing within creditor countries, noting that these are standard administrative procedures similar to parliamentary ratifications.

“Once the MoU was signed, the debt was effectively restructured. The bilateral stage is largely a legal translation of what has already been agreed. It is like waiting for your graduation certificate when you already know your final results,” Dr Musokotwane said.

He stressed that the more important question was whether debt restructuring was working for Zambia, to which he responded with a “clear yes,” highlighting significant economic improvements since 2021.

Dr Musokotwane pointed out that without restructuring, debt service for Eurobonds alone in 2024 would have cost the country US$2.6 billion. He contrasted this with the situation under the previous administration, when debt levels had become unsustainable and government revenues were largely consumed by debt repayments and salaries.

“By 2020, only nine ngwee from every kwacha collected in taxes remained for all other expenses. That path was unsustainable,” he said.

He also rejected claims that the current Government is “failing,” outlining key indicators of economic recovery and progress achieved since 2021, including:

• Economic growth averaging around 5 percent over the past four years.
• Foreign reserves rising from US$2.8 billion to nearly US$5 billion.
• Revival and expansion of mining operations, with production projected to reach one million tonnes this year.
• Free education from Grade 1 to 12, benefitting millions of children.
• Recruitment of over 40,000 teachers and thousands of health workers.
• Improved school infrastructure, providing better learning environments nationwide.

Dr Musokotwane concluded by encouraging accurate and informed public commentary on the debt restructuring process, emphasising that Zambia’s economic turnaround is both visible and verifiable.

“It is perplexing that those who caused the problem are spared criticism, while those fixing it are condemned. The evidence shows progress, not failure,” he said.