An Economist has reiterated that Zambia’s ongoing debt restructuring process will create fiscal space for government spending and restore investor confidence in the economy.
According to Minister of Finance and National Dr. Situmbeko Musokotwane, 94 percent of Zambia’s eligible debt has been restructured,, with final bilateral agreements expected to be signed soon.
Dr. Esther Banda told Money News in an interview that once the debt is fully restructured, it will ease pressure on government finances, allowing more funds to be directed toward public investment, infrastructure, and social services.
“What this means is that the Zambian economy will have more fiscal space and less pressure from debt payments,” Dr. Banda said.
She stated that Government can now focus resources on development rather than servicing interest and arrears.
Dr. Banda explained that the restructuring could generate around K5.5 billion in debt servicing savings between 2023 and 2031, giving Zambia an opportunity to strengthen its fiscal position.
She added that the move is expected to boost investor confidence and attract more foreign investment.
“The debt restructuring also supports the International Monetary Fund (IMF) programme, which is designed to enhance fiscal discipline and promote economic stability,” she noted.
Ms. Banda said the development gives Zambia a breathing space to implement key structural reforms such as diversifying the economy away from copper dependency and improving public financial management.
She, however, urged government to maintain prudent spending and sustainable borrowing practices.
