Zambia is trying to revive an economy that the International Monetary (IMF) says is growing at the slowest pace in more than two decades, after a slump in the price of copper, Zambia’s main export, over the past year.
Monday 24, June 2019
(Bloomberg) --Zambian president said that the Southern African nation, whose eurobonds are trading at distressed levels, is able to repay its debts and will soon emerge from an economic slump.
President Edgar Lungu, said, “Zambia is not in a position of a crisis, when you find that you are being strangled by debt, you hold back and see how you can realign your position so that in the end you continue being alive, you do not suffocate that is where we are now.”
Additionally, drought has also lowered water levels at hydroelectric dams, causing power shortages and an escalating dispute with copper producers that the country depends on for more than 70 per cent of export earnings isn’t helping either.
Zambia’s foreign debt has more than doubled since 2014, and servicing costs are forecast to rise by 90 per cent this year. Already, foreign exchange reserves have plunged to $1.4 billion dollars from a peak of nearly $4 billion five years ago.
Last month Moody’s cut its rating of Zambia’s debt further into junk territory, citing a rising probability of default.