Even before the COVID-19 pandemic began throttling the global economy, Zambia had been preoccupied with its growing public debt, leading to the country requesting the help of financial advisors to manage loans and debts that are expected to mature over the next couple of years. The continent’s second-largest copper producer saw its external debt increase from US$10.23 billion in June 2019 to US$11.2 billion, according to Finance Minister Bwalya Ng’andu. Chileshe Kandeta, spokesperson for the Finance Ministry, told Reuters that the Zambian government does not intend to unilaterally restructure its debt and would respect existing agreements with creditors.
Why It Matters
The African Union and G20 have been hashing out relief packages, including debt waivers or deferments, to help the continent’s poorer nations get through the COVID-19 pandemic. Zambia’s economy is heavily reliant on its export of raw materials, which has plummeted as countries retool their trade practices to address their most urgent needs. Maintaining good relations with international creditors will aid Zambia in its rebuilding efforts once the pandemic has passed, but it also constrains President Edgar Lungu’s administration when it comes to national relief efforts.