The African Development Bank (AfDB) has lifted sanctions imposed on Zambia effective December 15, 2019 following the payment of loan interest arrears of $1.4m.
In a letter to the Director of Public Debt Management at the Zambian Ministry of Finance, the AfDB stated the Bank had received payment of the Group’s Bills and had lifted the sanctions accordingly.
Last week the AfDB placed Zambia on fiscal sanctions for failing to clear arrears on the Bank Group Bills.
The Ministry of Finance Public Relations Unit discloses that Zambia owed $1.4 million in bank group bills.
Government attributed the delay to the high dollar exchange rate which required more Kwacha to pay the loan.
According to the African Bank’s Policy and Procedures for the Recovery of Arrears and Loans – the sanction applications, the bank disallows signing of any new loan on arrears of more 3months while arrears of more than six months attracts a suspension of payment to specific loans or total suspension if one of the loans to the borrower has been fully disbursed.
Sanction for arrears of more than nine months arrears calls for total suspension of disbursements and granting of new loans.
Remember this was a payment of $1.4m. Which they scrambled to pay. God knows how the government is going to pay the large sums they owe on Eurobonds, etc.
My guess is that they will pray (eye roll).