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Socialist Party (SP) president, Fred M’membe, has called on government to tell the nation whether there was a reduction in interest rates or possible partial write off of the debt, now that Zambia has sealed the debt restructuring deal with its Official creditors.
Government had announced that Zambia has finally reached an agreement on a comprehensive debt treatment with its Official Creditors under the G20 Common Framework after several years of going back and forth.
M’membe said the details of the restructuring may not offer Zambians paradise and the country should not confuse debt restructuring with debt write-off.
He noted that the US$6.8 billion private debt negotiations were yet to be concluded and that this was the difficult part.
“If you’re drowning in a sea of debt, you need debt restructuring to get your head back above water. Under debt restructuring, creditors change the terms of your loan agreements so that you can better manage the payments. This may include a longer loan term, a lower interest rate or even a reduction in the amount owed,” M’membe said.
He said the excitement coming with this announcement may be misplaced and it is being celebrated like Zambia is receiving US$6 billion.
“From the way we are reading it, the creditors have agreed to restructure Zambia’s debt and now the creditors and the country have to agree on the details after which agreements will be signed,” M’membe said.
He said at this point the agreement is non binding so Zambians maybe celebrating too soon but can only hope for favourable terms.
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