The debt situation in Zambia hits rock-bottom as some commercial creditors refuse to grant it relief it is seeking to ease the pressure.
According to the report issued to the Parliament on Thursday, the situation has been made worse since the government has been discriminatory in the treatment of creditors.
“Although we have obtained some relief under the debt service suspension initiative (DSSI) window, particularly from official creditors, engagements with commercial creditors, have not yet yielded the expected results. This is because these creditors were concerned that we were not treating all creditors equally,” Finance Minister Bwalya Ng’andu told the house.
Concerns have been raised that the Eurobond debt was not included in the request and the country had continued to service all Eurobond payment when they fell due at the same time allowing the accumulation of areas on other portfolios.
According to the Minister, the exclusion of Eurobond payment from the DSSI request also made creditors reluctant to give out loans since there were concerns that the relief they would give would be used to pay debt service to other creditors and not utilized in Covid-19 expenditures.
Ng’andu noted that the stock of external debt as at the end of 2019 stood at $11.97 billion but guaranteed that the debt for state-owned enterprises came to $13.55 billion.
“I have noted, regrettably, that some sections of the domestic and international society, that may not have read the recently released 2021 international debt statistics report by the World Bank, are quoting government debt as being $27.34 billion as opposed to $11.48 billion at end 2019,” he said as reported by Nation Africa.
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The amount mentioned by the World Bank report is the total national debt that included private sector external debt which is $15.57 billion.
Zambia has been engaging creditors for the approval for suspension of debt payment service payments for a period of six months in accordance with the terms of the G20 and Paris Club debt service suspension initiative.
The country’s media quoted Zambia President Edgar Lungu saying the debt situation in the country is giving him “sleepless nights”.
