Zambia has asked for a freeze on the debt payments it owes to private investors to head off a default, but its ambassador in Moscow admitted to Sputnik in an interview that Russian aid was crucial to salvaging the African nation's pandemic-hit econom
MOSCOW (Pakistan Point News / Sputnik - 09th November, 2020) Zambia has asked for a freeze on the debt payments it owes to private investors to head off a default, but its ambassador in Moscow admitted to Sputnik in an interview that Russian aid was crucial to salvaging the African nation's pandemic-hit economy.
"It will not be enough, that's why if cooperating partners like Russia, who is very close to Zambia, can assist in budget support to the country this could be a big relief to the country during this difficult period," Shadreck Luwita said.
Zambia looks likely to become Africa's first coronavirus-related default if it fails to repay interest payments that have come due.
"The government has approached the creditor countries from which some loans were acquired to make a request to defer the payment of interest on some loans to give the country breathing space within which to restructure the economy. In this regard the Chinese government has responded favorably... The government also approached the Eurobond holders, which amounts to about $3 billion requesting for the deferment of the payment of interest. We are waiting for their response," the diplomat said.
The debt moratorium that the G20 agreed on as a part of the coronavirus aid package to Africa to free up to $20 billion for low-income nations will end in late December. Many African countries insist on a complete debt relief to help them deal with the economic crisis.
Luwita said a debt relief could help a lot because Zambia's production in most sectors had been halted for almost nine months.
"This has a serious effect on the provision of the services in the country and servicing the debt as well," Luwita argued.
Even without the pandemic, the small African economy has suffered four years of drought that have devastated its crops. A region-wide lockdown to stem the spread of the virus has further plunged Zambia's Currency and cut import flows to the landlocked country that relies heavily on its neighbors. Exports of locally mined copper, its key commodity, have also been stifled.
