UPND president Hakainde Hichilema says government’s request for a suspension on interest payments on all three of Zambia’s Eurobonds for a period of six months is an embarrassment and compromises the country’s investor attractiveness.
In a Tweet, Tuesday, Hichilema disputed government’s assertion that the failure to repay Zambia’s sovereign debt was down to COVID-19 challenges and insisted that there was need for citizens to kick out the PF government and pave way for prudent, competent and visionary economic managers to tackle the country’s debt crisis.
“We in the UPND are deeply concerned by the news coming out of the Ministry of Finance over the requested suspension of debt servicing. We have time and time again told this incompetent government not to borrow, but they did so recklessly and with nothing to show for it. The Ministry of Finance alludes to COVID-19 as the primary cause of their inability to service the country’s debts, but we all know the truth. It is, indeed, the maladministration, corruption, fiscal indiscipline and economic incompetence that can be summed up as a disease called the ‘Dununa Reverse Virus.’ We had this affliction long before COVID-19,” tweeted Hichilema.
“The Ministry of Finance notes engaging with the IMF for a ball-out package, but not long ago, Mr (Edgar) Lungu told them to ‘go to hell!’ This is deeply embarrassing as not only does it compromise our investor attractiveness as a country, but it is a stain on our nation’s pride. Zambia must do away with this ill-equipped team currently governing our country and pave way for prudent, competent and visionary economic managers. It was a grave mistake to have a government of this nature, presiding over our country’s affairs. We have a mammoth task when we assume office in 11 months and we shall, indeed, fix this mess.”
According to the statement issued by Secretary to the Treasury Fredson Yamba, Tuesday, government has formally requested for a debt suspension on all the three Eurobonds due in 2022, 2024 and 2027, effective October 14, 2020, in response to the challenging fiscal situation.
“The Ministry of Finance has announced a Consent Solicitation to holders of its (i) US $750 million, 5.375 per cent; notes due 2022; (ii) US $1,000,000,000, 8.500 per cent; notes due 2024 and (iii) US $1,250,000,000, 8.970 per cent; notes due 2027 to request the suspension of debt service payments for a period of six months from October 14, 2020, effectively covering the upcoming three coupon payments due on on 14 October, 2020, 30 January, 2021, and 20 March, 2021 on the respective notes. The Republic of Zambia is confronted with a very challenging macroeconomic and fiscal situation aggravated by the COVID-19 crisis that has severely affected the country’s public finances,” said Yamba in the statement.
“A combination of declining revenues and increased unbudgeted costs caused by the COVID-19 pandemic have resulted in a material impact on the government’s available resources to make timely payments on its indebtedness leading to increasing debt servicing difficulties. This is the reason why the Republic of Zambia has taken the decision to apply for the G20 Debt Service Suspension initiative in August, 2020, and is requesting similar debt service suspension from its commercial creditors, including noteholders.”