The International Monetary Fund concluded its 5 day visit to Zambia and I had the opportunity to meet their delegation at parliament buildings.
The delegation disclosed that the IMF talks with the Zambian Government of a possible bail out deal were abandoned several months ago.
Among their key objectives was to assess the performance of the Zambian economy as part of their Debt Sustainability Analysis which shall be released in March, 2019. The study will give us an updated debt position.
The IMF emphasised that Zambia was still at very high risk of debts distress as debt levels continue to escalate. They also made it clear that Zambia had little or no room to borrow any more.
In this meeting, I asked the IMF what the implications would be in the event that Zambia defaulted on its euro bonds that are due in 2022, 2024 and 2027. In their response, the IMF said any form of default would trigger an economic collapse as all lenders may recal their funds on demand putting severe pressure on the Kwacha.
I therefore urge Government to signicantly slow down their borrowing ambitions and begin to realistically engage all the entities that are owed funds and renegotiate repayment plans where possible.