FINANCE Minister Dr Bwalya Ng’andu has written to the Paris Club requesting for payment suspension on Zambia’s principal and interest payments to all its official creditors from May 1 to end-December, 2020.
And the World Bank says it will only extend budget support to Zambia once the country gets on a programme path with the International Monetary Fund (IMF).
According to a Treasury statement released, Sunday, Dr Ng’andu confirmed that the Zambian government had requested debt payment suspension to enable it cope with the adverse effects of the COVID-19 pandemic, among other fiscal challenges that still persist.
The Minister acknowledged the development in a virtual meeting with World Bank Vice President for the African Region, Dr Hafez Ghanem where he was supported by Deputy Secretary to the Cabinet (Finance and Economic Development) Christopher Mvunga and Ministry Permanent Secretary (Economic Management and Finance) Mukuli Chikuba in Lusaka.
“The Minister and the World Bank Vice President also discussed the listing of Zambia as one of the eligible countries for relief under the Debt Service Suspension Initiative (DSSI); a programme designed to provide fiscal space to help countries respond to COVID-19 health challenges and economic shocks. Dr Ng’andu acknowledged receipt of an advisory note on the matter and on the G-20 debt relief initiative. He confirmed writing to the Secretary General of the Paris Club requesting for payment suspension on principal and interest payments to all its official creditors from 1 May, 2020, to end-December, 2020. Vice President Ghanem encouraged Zambia to continue pursuing relief under the initiative. The Minister pledged commitment to address debt service payments that fell due before the 1st of May 2020,” the statement read.
Dr Ng’andu also informed Dr Ghanem that Zambia had now finalized the procurement process for financial and legal services to assist in the liability management exercise of the country’s external debt and affirmed that a public announcement will be made this week once all the tender and contractual arrangements had been finalized.
And Dr Ng’andu appealed to the World Bank for advisory support ahead of the virtual IMF consultations to ensure a positive outcome for Zambia.
“The Minister took the opportunity to appeal to the World Bank Vice President for advisory support of Zambia’s preparations for the virtual consultative and information exchange mission with the IMF so that the country gets the best possible outcome and sets on a solid progressive trajectory, thereafter. Dr Ng’andu cited debt sustainability issues as the backbone of what has dictated previous and current engagements with the IMF. The Minister underscored the self-motivated fiscal restraint and austerity measures as a good basis for discussions during the upcoming and future engagements with the Fund. He expressed confidence that the efforts made by the government, among others, will be acknowledged by the IMF as sincere a prudent effort towards fiscal health and sustainability. The World Bank Vice President told Dr Ng’andu that a progressive outcome of the country’s consultative and information exchange engagement with the IMF will be a launch-pad for the Bank’s budget support,” read the statement.
