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It’s not the end of Problems – Finance Minister

Filed under: Breaking News,Business |
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Finance Minister, Situmbeko Musokotwane

Finance Minister Dr Siitumbeko Musokotwane says attaining the debt restructuring is not the end of Zambia’s economic challenges, reports Zambian Eye Correspondent.

Zambia is going through the high cost of living, the highest in history which has spoiled the economic recovery promise by the new administration of Hakainde Hichilema.

The cost of essentials have doubled contrary to the promise made by Hichilema who rode on a platform to lower the cost of living and fix the economy.

There has however been celebrations this past week after the Zambian government reached a deal with credit bond holders over the debt which is almost chocking the economy. The opposition has however said nothing will change since Zambia has not been servicing it’s debt.

Dr Musokotwane speaking when he featured on ZNBC’s Sunday interview monitored by Zambian Eye said the deal has not meant an end to the country’s economic problems.

The Minister however said the deal creates a breathing space for the economy.
He said without the deal restructuring the debt, Zambia would have been paying US$4.9 Billion this year alone.

He said this has saved the country from paying about 4.9 billion U.S Dollars this year to official and private creditors.

Dr Musokotwane said this amount is nearly half of the 2024 National Budget, which totals around 7.4 billion U.S Dollars.

He said once modalities are concluded, the Government will this year only pay less than 400 million U.S Dollars in debt servicing.

The Minister of Finance explained that if the debt was not restructured, the Government would have struggled to fulfill its obligations such as civil servants’ salaries, buying medicines in hospitals and investing in .infrastructure.

The minister said the country would have been crippled.

He said Zambia has become the first country to restructure its debt under the G-20 Common Framework, with the restructured debt accounting for about 77-percent of the country’s total debt.

The Finance Minister said focus has now shifted to conclude negotiations with another type of private creditors who include Commercial Banks and companies like contractors who offered a service to Zambia in various sectors such as road construction and other infrastructure developments in the country.

And the Finance Minister said the Government has put in place laws which mandate leaders to seek authority from Parliament before borrowing money.

Dr. Musokotwane says this is meant to ensure that the Government does not accrue unsustainable debt unlike in the past.

He said while the restructured debt is a significant step, it does not mean the end of the country’s economic challenges but should be seen as an opportunity for the Government to reorganize itself so that it continues attending to its responsibilities like recruiting Teachers and Nurses and paying meal allowances for students’ among other things.

Dr. Musokotwane has reassured the country that the government is actively working to streamline bureaucracy, to enable citizens to leverage the country’s resources for wealth creation and job opportunities.

Zambian Eye, 2nd April 2024

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