After Zambia is Denied Appeal for Suspending Debt Repayment, Jesuits Encourage Debt Relief

Zambia flag
Credit: Public Domain

After Zambia’s external creditors denied the government’s appeal for the suspension of the re-payments of the Eurobonds for six months, the leadership of the Jesuit Centre for Theological Reflection (JCTR) has encouraged the push for debt relief.

“JCTR is calling upon all concerned stakeholders (local, national, regional and international) to join hands and to show solidarity in advancing the noble cause to persuade Zambia’s creditors to consider any form of debt relief for the Zambian people,” JCTR officials say in their Sunday, November 15 statement.

In the message signed by JCTR Executive Director, Fr. Alex Muyebe, the leadership of the research institution that is based in the Southern African nation explains that “Zambia needs some space to address its indebtedness in a manner that will not harm the dignity of the lives of the millions of the Zambian people.”

On 22 September 2020, Zambia’s government applied for the deferment of the Eurobond interest payments of the US$3 billion debt for six months, until April 2021, while the relevant authorities work on a debt-restructuring strategy.   

The six-month grace period was to cover three coupon payments whose due dates are 14 October 2020, 30 January 2021, and 20 March 2021.

On Friday, November 13, the leadership of the Ministry of Finance in Zambia held a meeting with members of country’s External Bondholders Committee to discuss the possibility to defer the payment.

However, the lenders denied the request, a decision that coincided with the expiry of the 30-day grace period that Zambia was granted after the Southern African nation missed paying her coupon of US$42.5 million bonds, which was due October 14. 

Following the decision to deny Zambia the appeal for a repayment deferment, a sovereign debt default has been triggered. 

In their November 15 message, JCTR officials explain that the absence of debt relief from the bondholders compels the Edgar Lungu-led Government to “undertake serious stringent fiscal, monetary and economic austerity measures, which will gravely affect the social sector.”

“The situation is going to become even worse in the event of sovereign default because the country is going to be blacklisted resulting in facing higher interest rates and lower credit rating, which will make it difficult to borrow and to attract capital investment which the country badly needs to grow its economy to fight poverty and inequality,” they explain.

Viewing the present debt status as a real existential threat to the provision of public service, JCTR leadership calls on the Zambian government to “undertake an honest and hard reflection on how and why this country has found itself in a state that puts in danger the lives of its citizens.”

“Zambian leadership must present to the nation and the world a plan that will practically illustrate transformative and democratic practices to address the prevalent shortfalls in the country’s loan and debt contraction processes and in the public finance management,” they say.

The leadership of the Jesuit institution goes on to urge relevant government officials to “demonstrate how Zambia shall never fall in such perilous indebtedness again.”

The officials of the Jesuit research institution also call on citizens of the Southern African nation to “take keen interest and monitor this development.” 

They encourage Zambians to “demand accountability and involvement in coming up with a roadmap of how our country is going to pull itself out of this undesired and dangerous debt crisis that has a potential of being a liability to be passed on to future generations.”


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