Zambia’s Financial Landscape Faces Challenges Amidst Debt Restructuring Talks and Forex Pressures
Amidst ongoing discussions regarding the restructuring of Zambia’s national debt, economic expert Mr. Kelvin Chisanga has highlighted two critical factors that continue to strain the country’s financial stability.
Speaking during the week of financial literacy, Chisanga underscored the importance of addressing the unresolved national debt portfolio and the challenges surrounding foreign exchange matters.
“As we celebrate the week of financial literacy, it is imperative to state that as long as the national debt portfolio remains unresolved…there is a meeting taking place somewhere trying to rework on a national proposal of debt restructuring with some key stakeholders,” noted Chisanga.
He emphasized the need for a progressive model of actions to address these issues effectively. Chisanga echoed sentiments from ABSA regarding Zambia’s financial outlook, citing the delayed debt restructuring process and pressure on the local forex market as significant concerns.
“In the short term, the nation’s financial position looks really bad due to two standing factors: the delayed debt restructuring process at the macroeconomic level and the pressure faced by the local forex market,” stated Chisanga.
The economic expert highlighted the impact of these challenges on Zambia’s economy, noting decreased production in terms of aggregate output. Factors such as climate-induced effects and reduced agricultural output have contributed to the strain on various sectors, including tourism and agriculture.
“The local economy is really stressed with less production in terms of aggregate output…energy is currently playing the cards at the back of climate-induced effects coupled with less expected agricultural output this farming season,” explained Chisanga.
Furthermore, Chisanga emphasized the interconnectedness of Zambia’s economy, particularly with regards to the mining sector, which serves as a critical component. He cautioned that challenges faced by complementary sectors could significantly impact mining production.
“As the country is known for its mining sector, being a critical component and composition of the Zambian economy, the effects in many ways that are being faced by many other complementary sectors of the domestic economy will have a strong telling effect on mining production as well,” warned Chisanga.
