Since the deal with bondholders was announced, the discourse has been intense – and rightly so! On Friday, 29 March 2024, I published a paper titled “Finally… Bondholder Deadlock Debtlock Broken” (accessible on my LinkedIn page, Andrew Chibuye) wherein I explained what the deal with bondholders means in detail.
In all of the debates that have ensued after the deal was announced, there appears to be one thing that everyone agrees on. Everyone seems to agree that the number one priority is to GROW THE ECONOMY SO AS TO BE ABLE TO SERVICE THE DEBT AND, MORE IMPORTANTLY, TO BENEFIT THE ZAMBIAN PEOPLE. There is disagreement about HOW to go about it, but much less about the issue itself. If the debt gets serviced but the Zambian people are no better off, it’ll be less than ideal!
Think of it this way… Debt repayments on the restructured debt will pull the economy backwards. This is because no new assets are being created. The assets this $13.2 billion created cannot sustain the debt repayments. So the fruits of future economic growth need to deliver ongoing benefit to the Zambian people AND settle what is, in part, the sunk cost of long outstanding and unsustainable debt.
