Q FM Africa's Modern Radio
The Jesuit Centre for Theological Reflection (JCTR) says the proposed strategy to refinance the two Eurobonds of US$750 million and US$1 billion by way of borrowing from International Capital markets as they mature in 2022 and 2024 will worsen the country’s indebtedness.
In a statement issued to QFM News, the JCTR says borrowing from the International Capital markets is not an effective mechanisms to reduce Zambia’s debt stock.
It says Zambia will be under severe debt stress if no adequate contingency plans are ma
de to thwart Eurobond loan bulk repayments as they mature.
The JCTR says there is need to prepare adequately for these shocks which are looming in the 2022 and 2014, stating that it is disturbing that has applied itself to strategize on how to repay the two Eurobonds given the short proximity maturation period and intervals of the two bonds.
It states that besides the risks of a new debt crisis, Zambia is also opening itself to threats from vulture funds.
The JCTR says Zambia must thwart the “too-little–too-late syndrome“and deal with the rising debt problem in a sound, adequate and logical manner.
It says this means careful evidence based advanced planning.
The Centre states that it is evident that to address rising debt, Zambia has no choice but to modernize its tax system.
The JCTR has further called for the strengthening of the legislative framework governing debt contraction so that there is parliamentary oversight.