The deal that Zambia strikes with its many international creditors could set a precedent for Africa.
Since taking office in August 2021, Zambian President Hakainde Hichilema (HH) has been wrestling with the huge and sometimes secret foreign public debt he inherited from his spendthrift predecessor, Edgar Lungu. It’s officially calculated at$14.1-billion but could be higher. In 2020, Lungu’s Zambia became the first African country to default on its foreign debt, failing to service its Eurobonds.
Part of HH’s campaign has been to cancel public projects costing more than $2-billion. He has also tabled the Public Debt Management Bill to strengthen Parliament’s oversight of borrowing and limit it to 65% of GDP, Isaac Mwaipopo, executive director of Lusaka’s Centre for Trade Policy and Development, told ISS Today. He said HH had set up a debt-management office to ensure future debt was sustainable and launched an audit to ensure services purchased by the state were value for money.
At the heart of the government’s debt-management strategy is the provisional$1.4-billion loan it negotiated with the International Monetary Fund (IMF) last December. This should help pay off its debt and maintain social services.
But the loan is conditional, depending mainly on the government negotiating…