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The Policy Monitoring Research Centre (PMRC) has projected a rise in the volume of international investments in the country following Zambia’s completion of its debt restructuring programme with the Official Creditors.
PMRC Executive Director, Sydney Mwamba, in a statement issued in Lusaka on Wednesday said foreign investors will be more willing to invest in Zambia due to the country’s economic prospects.
Mwamba said the debt restructuring deal Zambia has reached will enable the country to rearrange its debt payments and lessen its overall debt load.
He was hopeful that the private creditors, who are owed US$6.8 billion, will agree to a restructuring agreement that is comparable to the one that was struck with the official creditors.
“The decisions taken by the Zambian government and the international community will determine how the debt restructuring in Zambia affects the nation after the three-year grace period,” Mwamba said.
He said Zambia may come out of the debt crisis stronger than ever if the government successfully puts sound economic policies into place and lures international investment.
“The government has demonstrated resilience during the road to debt restructuring by instituting key economic reforms critical to economic revival.
However, if the government is unable to address the country’s economic problems, Zambia may face a long and difficult road to recovery, hence the need for multi-stakeholder consented efforts towards the path to economic recovery,” Mwamba said.
He said Zambia will be able to raise more money to pay down its debt if the economy expands at a healthy rate in the three-year grace period.
Mwamba recommended that government needs to develop its public finance management systems and increase openness and accountability to improve economic governance because this will allow for the effective and efficient utilization of national resources.
“Zambia needs to redirect its economy’s growth trajectory away from debt-fuelled consumption and towards investments in profitable sectors like manufacturing, tourism and agriculture,” he said.
Mwamba said these measures will result in increased employment and exports thus increasing the amount of financial resources available critical to paying off the country’s debt.
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