Jesuit Scholars in Zambia Want Debt Restructuring Delays Addressed to Lower Cost of Living

They add that restructuring the debt “is critical in stabilizing the economic fundamentals which are crucial for economic growth and poverty alleviation.”

The Jesuit scholars note that the stagnation in the debt restructuring process is contributing to the high living cost, which has since surpassed the K9,000 ($513) mark in the year 2023. This is considerably higher than the average monthly income in the country, which is at K4,215($ 240).

“Uncertainty surrounding the debt restructuring process has caused investors to hold back from buying government bonds, resulting in a decline in demand. According to the Ministry of Finance and National Planning, this has put pressure on the kwacha, which has weakened against major currencies,” they say.

JCTR officials add, “From a cost-of-living perspective, a weaker currency implies greater import costs for an import-dependent country like Zambia, with the brunt of this burden being passed onto consumers in the form of higher food, fuel, and other essential commodity prices.” 

In addition, the Jesuit scholars say, “a weakening exchange rate, as evidenced by the recent performance of the kwacha, has the potential to lower investor confidence in the long run.” 

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In January, U.S. Treasury Secretary, Janet Yellen, accused China of delaying Zambia's loan restructuring process.

“I know the Chinese have been a barrier to concluding the negotiations,” Yellen said during her visit to the country in January. 

The Chinese government, on its part, told the U.S. to stop interfering with its affairs. 

In an April 21 Reuters report, Zambia’s official sector creditor committee indicate that the country will send its debt restructuring plan to China and to other creditors soon. 

In their statement shared with ACI Africa, JCTR officials ask the Zambian government to maintain “constant engagement” with civil society organizations, such mechanisms as the CSO-Debt Alliance throughout the restructuring process. 

They also urge the Zambian government to “limit any further external debt contraction and continue to ensure that any future borrowing for developmental projects and programmes adheres to the principles outlined in the Public Debt Management Act.”

“Government must present a clear medium-term domestic resource mobilization strategy that will enable substantial revenue generation for social sector spending, which is crucial for addressing the high living cost,” JCTR officials say.

Magdalene Kahiu is a Kenyan journalist with passion in Church communication. She holds a Degree in Social Communications from the Catholic University of Eastern Africa (CUEA). Currently, she works as a journalist for ACI Africa.