An Economist says China’s decision to consider cancelling interests on Zambia’s debt and also extend the debt repayment period is a relief to the country’s treasury.
Mambo Hamaundu also told Money FM News in an interview that any postponement or extension of repayment period is good for Zambia because the country does not have adequate money in the coffers.
Mr. Hamaundu stated that once the move materializes, it will release some pressure off the treasury because there is money and this is making it difficult for the country to pay back the debt.
“Any cancellation of debt or interest is a relief to the country, and any deferment or extension of repayment period is actually good for the country because it is very apparent that we do not have sufficient money in our coffers. And we need to have such gestures or actions coming from people who we owe money.”
“It is a good thing that they are considering that and we only want to hope that it actualize does materialize. I do not know the levels of indebtedness that we have to China vis-à-vis where they are considering waving interest, but whatever the case is, no matter how much the amount is, it will release some pressure off the treasury,” Mr. Hamaundu said.
He further thanked the Chinese government for the gesture.
“I think it’s a good gesture by the Chinese government if it does materialize,” he said.
On Saturday, Chinese Ambassador to Zambia Li Jie disclosed that China will consider cancelling interests on Zambia’s debt to that country that was supposed to mature by the end of 2020.
Mr. Li further said China will also extend the debt repayment period for Zambia so as to allow the country recover from the current economic challenges which have been caused by the Covid-19 pandemic.