Zambia's debt restructuring: Progress or just ticking boxes?
Mumba's presentation underscored the complex challenges facing Zambia as it navigates both external and internal debt burdens.
MAPUTO, Mozambique— Zambia's experience with the G20 Common Framework for debt treatment reveals a complex landscape of mixed signals and unclear progress, according to Peter Mumba, coordinator of the Zambia Debt Alliance, writes Winston Mwale.
Speaking at the 4th African Conference on Debt and Development (AfCoDD IV) in Maputo, Mozambique, on Friday, Mumba offered a candid assessment of Zambia's debt situation, highlighting both progress and persistent challenges.
"With the Fund under the common framework continues to evolve because there are always these mixed signals, that there is a deal, there is no deal, now we have another deal," Mumba said.
"And maybe, we are still negotiating."
Zambia, one of the few countries actively engaging with the Common Framework, has signed several agreements with creditors.
However, Mumba cautioned against interpreting these agreements as genuine progress.
"Sometimes we get to ask whether there is really progress, or whether we are just ticking boxes," he said.
Mumba identified three significant challenges facing Zambia:
1. Transparency and Accountability: The debt restructuring process lacks clarity, particularly regarding private creditors. Non-disclosure agreements hinder public access to information and independent analysis.
2. Addressing Root Causes: Illicit financial flows remain a significant concern. Recent estimates suggest that the amount leaving Zambia illegally could potentially fill the financing gap created by drought.
3. Impact of Austerity Measures: Ongoing load-shedding and the removal of subsidies on petroleum products are disproportionately affecting vulnerable populations. Mumba noted a disconnect between the government's commitment to debt restructuring and the lack of investment in critical social sectors like education and health.
"The challenge we have in Africa, and I think some of the African continent, we are still looking at our neocolonial leaders as our visionary for us," Mumba said, criticizing the reliance on external financial institutions for debt sustainability assessments.
He pointed out that while the East African Community had agreed to a 50% debt-to-GDP ratio limit, "the IMF and World Bank came on board and indicated, your debt is sustainable regardless of how you are performing."
Mumba stressed the need for a more coordinated approach to debt restructuring among African countries.
"Beyond that, I think there are other issues that have come up again," he said.
"When you talk about the process of our implementation of the IMF reforms, like I said, I think people would want to see what the connection is between an IMF bailout package and, you know, improved livelihoods."
The conference, which brought together debt experts and activists from across Africa, aimed to build a common approach towards making Africa a "rule maker, not rule taker" in global economic affairs.
Mumba's presentation underscored the complex challenges facing Zambia as it navigates both external and internal debt burdens.
His insights highlighted the need for a more holistic and strategic approach to debt restructuring, one that addresses root causes, prioritizes transparency, and ensures that vulnerable populations are not overlooked.
As the conference concluded, participants emphasized the importance of a united African approach to tackling the continent's debt crisis, offering hope for a more just and sustainable economic future.