ZAMBIA’S 2020 DEBT DEFAULT ON REPAYMENT OF EURO BONDS CONTINUES TO NEGATIVELY AFFECT THE COUNTRY`S ECONOMY

Economist Michelo Maunga says Zambia’s 2020 debt default on the repayment of euro bonds has continued to manifest itself in the economic challenges the country is currently facing.

According to the Ministry of Finance, the total public debt stock climbed to $32.8 billion, including interest arrears at the end of last year, of which $18.6 billion was external and the end of June in 2022 total debt including interest arrears was $32.5 billion, with $17.5 billion external debt.

Mr. Maunga tells Phoenix News in an interview that despite Zambia looking to restructure its debt after becoming the first African country to default during the covid-19 pandemic, the default has left the country in a vicious cycle where it needs to borrow to finance economic development.

He says the move to suspend interest payments to its Eurobond holders has led to a financial crisis stemming from heightened risk perception among other negative impacts on the economy.