LUSAKA - Government says its debt restructuring and refinancing measures are expected to retain more than US$11.5 billion within Zambia’s economy, creating additional fiscal space for national development and public service delivery.
The savings comprise more than US$8.5 billion in reduced external debt repayments between 2026 and 2031, together with additional savings resulting from the successful buyback of Zambia’s remaining US$1.36 billion Eurobond due in 2053.
Government said that without the debt restructuring, Zambia would have been expected to repay approximately US$13 billion to external creditors between 2026 and 2031, based on annual external debt service obligations of about US$2.6 billion.
Following the restructuring of the country’s external debt, Zambia is now expected to repay less than US$4.5 billion over the same five-year period, reducing annual debt service obligations to below US$900 million.
This translates into more than US$8.5 billion in reduced external debt repayments during the period.
In addition, Government successfully completed the buyback of Zambia’s remaining US$1.36 billion Eurobond due in 2053 after securing US$600 million in concessional financing from the African Development Bank.
The transaction replaced higher-cost commercial debt with lower-cost concessional financing, reducing future interest obligations and generating additional savings over the coming years.
Government said the combined effect of the debt restructuring and refinancing measures means that more than US$11.5 billion is expected to remain within Zambia’s economy instead of being directed towards external debt repayments and related financing costs.
The additional fiscal space is expected to increase Government’s capacity to finance priority areas, including free education, recruitment of health workers, road infrastructure, energy, agriculture and other essential public services.
In practical terms, Zambia has moved from a position where approximately US$2.6 billion, equivalent to about K70 billion, was expected to be spent annually on external debt repayments to a position where annual payments are expected to fall below US$900 million, or about K24 billion.
Government says the resulting fiscal savings will provide additional resources that can be directed towards national development priorities while reducing the burden of debt servicing on the national budget.
Source:
Ministry of Information and Media Zambia