Economist Trevor Hambayi has charged that the debt restructuring process will not provide direct benefits to the current high cost of living being experienced countrywide.
The cost of living for a family of 5 currently stands at over K10, 600 as of March, 2024 as measured by the Jesuit Center for theological Reflection (JCTR).
And with the government striking a deal with external bondholders of about 75% and the government’s revelations that it’s in talks with private creditors to restructure $3.3 billion of Zambia’s commercial debt, questions have been raised on whether the debt restructuring process will have direct benefits on the high cost of living.
Speaking in an exclusive interview with the Zambian Business Times -ZBT, Economist Trevor Hambayi said that unlike providing direct benefits on the cost of living, the debt restructuring process will provide the country an opportunity to grow economically.
He noted that It’s the growth of the economy that will give the country direct benefits on the cost of living.
“Debt restructuring itself is not exactly supposed to provide direct benefits on the cost of living but it has to provide us an opportunity to be able to start to grow our economy. It’s the economy that will grow that will give us direct benefits on the cost of living. At the moment we have not yet completed the debt restructuring process,” he said.
“There is still a component of around $3 billion that needs to be restructured from the private creditors before that process is complete. Only when it’s complete can we then say what basic leverage can we use this to be able to speak to driving our economy,” said Hambayi.
It can therefore be noted that Zambia is still in talks to restructure $3.3 billion of commercial debt, after reaching a 75% deal with overseas external bondholders of its sovereign bonds critical for economic growth.
