Analysis by a financial expert has indicated that the cancelled 22 million dollars from Zambia’s debt stock by China is less than one percent of the total debt owed to the Asian country.
Munyumba Mutwale of Nikiwa capital Partners says that considering the economic brief issued for the first quarter of 2019 by the Ministry of Finance, Zambia’s external debt stood at 10.18 billion dollars as at March 2019.
According to the finance ministry, China owes less than 30 percent of the total external debt stock which is approximated at about 3.25 billion dollars.
Mr. Mutwale says Zambia’s major challenge is debt repayments, which he says risks the country being viewed as a defaulter in the global community.
He says Zambia is in a cash drought and needs to position itself to be viewed as being credit worthiness.
The Economics Association of Zambia has advised that the Chinese and Zambian governments should meet and discuss about the possibilities of consolidating Zambia’s debt and give it to one lender.
Association President Dr. Lubinda Habazoka says consolidating the debt will make it easier for cash flow projections and debt repayment schedules.
Dr. Habazoka says this will help free up the country’s fiscal space and enhance economic development.
The EAZ President was speaking in an interview with Money FM News following reports indicating that China has scrapped over 22 million dollars of the amount of debt it is owed by Zambia.
The Cancellation reportedly follows consultations between the two countries from which they agreed exempt the debt burdened country from paying back a batch of an interest free loan that matured on 31st December 2018.