(3 minutes read)
· Zambia’s central bank governor Christopher Mvunga said yesterday that his country could have paid US$42.5 million towards its Eurobond interest liabilities
· Christopher Mvunga said that the country deliberately chose not to pay in the spirit of fairness — as it wanted to treat all creditors equally
· It was a conscious decision not to pay to make the creditors understand that they should treat all countries equally and fairly
Zambia’s central bank governor Christopher Mvunga said yesterday that his country could have paid US$42.5 million towards its Eurobond interest liabilities. The country has defaulted on payment of interest on a Eurobond, which was due recently. Zambia has now became Africa’s first economy to default during the coronavirus pandemic,
Christopher Mvunga said that the country deliberately chose not to pay in the spirit of fairness — as it wanted to treat all creditors equally. It was a conscious decision not to pay to make the creditors understand that they should treat all countries equally and fairly. He said that Finance Minister Bwalya Ngandu was engaging all creditors to negotiate the rescheduling of debt repayment.
The Zambian government in September requested a six-month moratorium on interest payments for three commercial Eurobonds worth US$3 billion. However, it missed the US$ 40 million interest payment due on one bond on October 14. This led to ratings agency S&P to declare the country in default.
The grace period which ended recently was for payment on a US$750 million Eurobond due to expire in 2022. Zambia’s external debt has surged to nearly US$12 billion this year, despite having a huge copper deposit in the country.
