Zambia actually saying it has defaulted on Eurobonds

Zambia actually saying it has defaulted on Eurobonds

In case you missed this, the Zambia government has no money to repay external debt, that is, the 11 billion dollars it borrowed from Shylocks (Eurobond rubbish) in Europe and China. So, the PF government has contracted a French Company called Lizard or whatever to go and ask the lenders to wait temporarily for their money.

The owners of the money were supposed to receive it by 2022. But Lizard will negotiate that they should instead receive it in 2024 or some other time in future. That is the only job they will do but will be paid $5 million.

They are not going to ask for debt cancellation or reduction. In fact, if the owners of the money agree to postpone, there will be an interest. So in 2024, the debt will be even bigger. But will Zambia be richer in 2024? Where will it get that money which it can’t pay now? By the way, by 2024, Zambia will need to borrow more money to repair roads.

AND, there is something more serious but hidden in this decision. By engaging these Lizards to go and negotiate, Zambia is admitting that it won’t manage to pay, that it will default. In law, this is the true definition of anticipatory breach. The lenders can now actually invoke the clauses in the contract that deal with default.

Zambia is in trouble.

Here is what the Lizards will do. They will phone the lenders and agree to share the bonus $5 million then wait for the $11 billion plus interest in 2024.

Minister of Finance Bwalya Ng’andu has really disappointed the country. We didn’t know the man was so incompetent and unpatriotic. No patriotic Zambian can agree to waste $5 million like this when  what the country does not have is money.

If you don’t have money, why hire French crooks to negotiate for you at such a huge bill? What impression are you giving to lenders? Wouldn’t you receive more sympathy if you just send a few civil servants from the ministry of finance to go and kneel down? How do you go to ask for money from a neighbour while driving the latest Range Rover?

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