• Zambia’s debt burden crippled government’s budget.
• This made it difficult to invest in infrastructure and social spending for the larger population living below the poverty line.
• Government now has fiscal space to allocate resources towards key areas.

Jesuit Centre for Theological Reflection (JCTR) says it is expected that the debt restructuring agreement may bring some relief to ordinary Zambians through reduction of the cost of living in the medium term.
Centre Communications and Digital Engagement Officer Bernard Mwaba, said this is largely due to the fact that Zambia’s debt burden crippled government’s budget, making it difficult to invest in infrastructure and social spending for the larger population living below the poverty line.
Mr. Mwaba stated that with the rescheduled debt, government now has fiscal space to allocate resources towards key areas which will lead to improved livelihoods.
He however noted that debt rescheduling does not come risk free, stating that should the government fail to follow through on its commitments to reduce debt levels, whilst implementing economic reforms and fighting corruption with draconian measures, the country may relapse to similar or even graver situation in the future.
“It is important to note that the debt rescheduling agreement does not completely resolve Zambia’s economic challenges for her 19.6 million population. Zambia quite sadly still faces significant structural and administrative issues that will need to be addressed in order to achieve sustainable economic and development goals in the given grace period.”
“The country must enhance its productivity and value addition to generate more revenue from its resources. The country must also address two greatest enemies to development; poor debt management and resource wastage through corruption, financial crimes and illicit financial flows,” Mr. Mwaba stated.
And with regards to the currency, Mr. Mwaba noted that the Zambian Kwacha, which has been under immense pressure due to the debt distress and fiscal uncertainties may stabilise.
He said the appreciation may lead to lower inflation and affordable prices for goods and services which, might help to reduce the cost of living for the average household.