The Movement for Democratic Change MDC firstly congratulate His Excellency, President Hakainde Hichilema and his administration for having reached an agreement with Zambia’s eurobond holders to restructure $3.5 billion in debt under the G20 Common Framework.
MDC Acting Media Director Edmond Miti said MDC believe this has been a very demanding process having to convince bondholders over the years of negotiating and this debt relief will significantly have positive impact on Zambia’s economy.
Mr. Miti said MDC’s projection is that deferring the payment of this debt will relieve pressure exerted on our local currency thereby translating into appreciation of the Kwacha and increased economic activity.
Mr. Miti said his political party believe that if the appreciation of the Kwacha is sustained coupled with reduced concessional interest rates at the time of maturity of the country’s debt about 20 years from now, government is likely to lower payment of installments in Kwacha terms than we would have paid now.
He said this extended period as a result of this agreement will also mean that government will have more money at its disposal for expenditure.
“Because of this, it will likely benefit suppliers of goods and services as government will be spending on social goods and services.*
“Due to this, we are projecting that this action will spur further economic activities and increase liquidity in the economy.” Mr. Miti said
And Mr. Miti said the debt restructuring agreement allows our government to focus on local debt dismantling and with payments made to local contractors and suppliers, they will now be able to settle their statutory obligations as majority are owing in taxes and other obligations.
“we want to encourage government not to pay particular attention to doom sayers regarding this progressive agreement with eurobond holders.”
“Once again, we congratulate the President and his leadership on this milestone achievement that sets Zambia on a better economic trajectory than it was before reaching to this agreement.” Mr. Miti said
