Debt restructuring process slow because Zambia is asking too much from creditors —PWC Partner

Zambia’s debt restructuring process is difficult as the impact of debt requested means that creditors lose over 45 percent of the value of the amounts owed by the country.

The impact of the restructuring requested is among the factors making the process difficult for Zambia, says PricewaterhouseCoopers (PWC) Senior Partner, Andrew Chibuye.

Chibuye explained that the impact of Zambia’s publicised request meant creditors lose over 45 percent of the value of the amounts owed by Zambia.

Read more: Zambia, other debtor countries hold roundtable debt restructuring talks in Washington

“To appreciate this better, imagine you lent someone money and later asked for almost half to be forgone… What would your reaction be?” he said on his official facebook page.

Chibuye said another factor which had complicated the process was the number and types of creditors owed:

He pointed out the Paris Club and Non-Paris Club, Eurobond holders, multi-lateral lenders, Banks, suppliers, as among the creditors.

“This means it takes more work to get an agreement as each may have its demands. In addition, each has different stakeholders to whom they are accountable to… Citizens, depositors, investors, etc. They, therefore, need to demonstrate that they have done their best to get the best possible deal,” Chibuye said.

He also pointed out that there were many countries that were experiencing debt distress.

Chibuye stated that what was done for Zambia could set the tone for what happened to other countries.

” I expect that countries that follow may experience a smoother process,” he said.

Chibuye however said the general view was that Zambia had done what it needed to do to demonstrate that it had implemented the reforms needed.

This, he said, was the view of the government and key stakeholders such as the International Monetary Fund (IMF) and the World Bank.

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