Africa-Press – Zambia. Lunte Member of Parliament, Hon. Mutotwe Kafwaya, has expressed grave concerns over the alleged collapse of the government’s debt restructuring deal, citing corruption and dishonesty as major contributors to the deal’s demise.
Hon. Kafwaya asserted that the debt restructuring deal, a key initiative pursued by the government, is now “as good as dead” due to what he claims is a lack of transparency and questionable practices in its execution.
Among the highlighted issues, Hon. Kafwaya pointed to the revelation that the government had purportedly agreed to pay $2.5 billion between 2024 and 2025 to bondholders. This decision, according to him, has reportedly angered the International Monetary Fund (IMF). He emphasized that committing to such a substantial amount contradicts the ongoing $1.3 billion program with the IMF and raises concerns about the financial feasibility of such an agreement.
Furthermore, Hon. Kafwaya criticized the government for agreeing to an 18% haircut instead of the 40% demanded from other creditors, deviating from the G20 Common Framework’s principle of equal debt treatment. He disclosed that the face value of the new bonds was increased to $3.135 billion in both scenarios, exceeding the original $3 billion face value of the old notes.
The Member of Parliament expressed his dismay, stating, “The agreement announced on 26th October 2023 with the External Bondholder Steering Committee is so absurd that it has shocked the IMF, Official Creditor Committee headed by China and France.”
In response to these concerns, Hon. Kafwaya urged the government to provide an explanation for the alleged scandalous clauses in the debt restructuring deal, which has reportedly been renounced. He emphasized the gravity of the situation, indicating that an announcement about the renouncement had been directed to the London Stock Exchange.
Hon. Kafwaya concluded by asserting that the reported carelessness in dealing with such matters is now costing the nation and could potentially lead Zambia back into a state of debt distress. He called for increased honesty in governance matters to avoid economic hardship and soaring living costs. The government has not yet officially responded to these allegations, and the situation is likely to draw further scrutiny in the coming days.
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