Brief facts about the debt restructure
By Dr Lubinda Haabazoka

– 2019-2020: Zambia faced challenges in repaying its debts, including its international dollar-denominated government bonds known as “Eurobonds”.

– May 2020: Zambian President Edgar Lungu’s government hires French firm Lazard to advise on restructuring the cash-strapped southern African nation’s foreign debts, then officially said to be $11 billion.

– June 2020: The country requests to have its debt payments frozen under the G20-led Debt Service Suspension Initiative (DSSI), which was established in response to pandemic.

– November 2020: Zambia misses a $42.5 million payment on one of its international bonds, making it Africa’s first pandemic-era sovereign default.

– February 2021: Lungu’s government requests a debt restructuring under the G20’s Common Framework, a process also set up in response to the pandemic.

– August 2021: Opposition leader Hakainde Hichilema secures a victory in a presidential election.

– June 2022: Governments that have lent to Zambia form an “official sector” creditor committee (OCC) to formally start restructuring their loans to the country.

– July 2022: Zambia’s OCC, co-chaired by China and France, commit to granting the country debt relief, paving the way for the International Monetary Fund to approve a $1.3 billion, three-year rescue loan.

– June 2023: The OCC agrees to restructure its combined $6.3 billion worth of loans to Zambia.

– Just over $4 billion of that money is owed to the Export-Import Bank of China, underlining the importance of Beijing’s support for the deal.
October 2023: The government reaches an “agreement in principle” with a group of international investment and pension funds that hold $3 billion worth of its sovereign bonds that it had sold on the global capital markets.
The deal proposes consolidating that debt into two bonds with easier terms and longer payment deadlines, but also additional faster payments if the country’s economy does well.

– November 2023: The deal suffers a major blow after the government says that its bilateral “OCC” creditors had vetoed a revised deal with its bondholders on the grounds that it still does not provide enough debt relief.
Angry bondholders say the OCC is demanding debt relief from them that is materially higher than either Zambia’s government or the IMF deem necessary.
January 2024: Zambian officials travel to China for debt talks with its Chinese creditors, including the Export-Import Bank of China and commercial banks.

-February 2024: Zambia’s President says India and China have signed restructuring agreements, the last two of its bilateral creditors to do so.

March 2024: The government starts formal talks again with the international bondholder group on a new debt rework proposal.

The New Proposal agreed

– Government to issue two new bonds – Bond A and Bond B to replace the three old Eurobonds. Bond A has a higher interest rate than the other three bonds. Bond B has a lower interest rate but should Zambia’s economy improve, rates can increase and payments escalated.

In a layman’s language the Eurobonds are still there because we have consolidated them with two new ones. This is to ensure resumption of debt service.

Going forward Zambia resumes to pay its debt beginning with over $180m mid year on Eurobonds alone.

– This is not a debt cancellation
– There is no reduction in the Eurobond debt. Capital markets never lose out! This is what I said even in 2012 when there is excitement over the bond issue.
– Lazard the company engaged in 2020 is still spearheading the debt restructuring process!!!!

The best option was to refinance the Eurobond by getting a bilateral loan from any partner under concessional terms or the IMF itself since it is championing this. The IMF should have exchanged the eurobond principle with its loan. $1.2bn they gave is a drop in the ocean especially taking into account the conditions they gave.

But all in all this is a step in the right direction as we can’t have a deadlock forever.

Way forward

– We expect fiscal stress as we resume to service our debt. during the last 4 years we have not been servicing external debt, we did nit have a deliberate sinking fund to set aside resources to prepare us for this. we also increased public expenditure by employing more civil servants. This will be felt when we resume debt service because by 2020 there was little fiscal space already.

– Going forward, we need to seriously work on the bottlenecks and impediments that are preventing economic development. A new radical serious approach aimed at Zambianising the GDP should be implemented if we are to be competitive as a country!

Credit Reuters for the timeline

What is a Eurobond Debt Restructuring in Simple language?

Please read till the end.

UKWA Party went to borrow Kaloba, then during there time in office they failed to pay back and bene bakaloba benze ku ikila po. So president HH came and paid all nkongole Zaba UKWA and was in clean books to avoid damaging the credit rating of Zambia.
• Countries sometimes borrow money by issuing bonds (like an IOU) to international investors. Eurobonds are bonds issued in a currency other than that of the home country (in Zambia’s case, US dollars).
• When a country can’t afford to pay back this debt, they can renegotiate with bondholders for better terms – that’s a debt restructuring. This might mean:
o Lowering interest rates
o Extending the time, they have to pay everything back (which Zambia chose)
o Sometimes forgiving part of the debt(as was with HIPIC)
Benefits of Zambia’s Restructuring
Restructuring a $3 billion Eurobond carries several benefits and advantages for Zambia:

1. Reduced Financial Strain: Restructuring allows for the renegotiation of the terms of the debt, such as extending the repayment period or reducing interest rates. This can alleviate immediate financial strain on the Zambian government by providing more manageable repayment schedules. Imagine watenga Kaloba and you are struggling to pay, then bene baka loba says we are giving you more time invest this money you owe us muli salaula or unga, ukapanga profit pay us after 20 years. That’s what debt restructuring mean. But ba UKWA were not paying kaloba instead the money for debt repayment they used to rent houses and buy houses for slay queens muma Salama Park.

2. Improved Cash Flow: By extending the repayment period, Zambia can spread out its debt obligations over a longer time frame, resulting in lower annual debt service payments. This frees up cash flow that can be directed towards essential services such as healthcare, education, and infrastructure development.
3. Avoiding Default: Debt restructuring helps Zambia avoid defaulting on its debt obligations, which could have severe consequences such as damaging its credit rating, increasing borrowing costs, and limiting access to international financial markets.
4. Stabilizing the Economy: By addressing unsustainable debt levels, restructuring contributes to economic stability by restoring investor confidence, encouraging investment, and fostering economic growth.

5. Political Stability: Successfully restructuring the Eurobond demonstrates the government’s commitment to managing its finances responsibly, which can enhance political stability and investor trust in Zambia’s economic policies.

Economic Implications
• Positive Long-Term Outlook: The restructuring is a crucial step towards economic stability and growth by reducing debt burdens that were stifling progress.
• Short-Term Challenges: Economic recovery takes time. There might still be short-term challenges related to the original debt and managing the economy during this transition.
• Focus on Sustainability: Crucial now to implement policies that prevent similar debt problems in the future – responsible spending and boosting revenue generation.
In Layman’s Terms

Imagine you have a big credit Ku bank, you cannot pay. You negotiate with the bank to lower your payments and give you more time. This helps you avoid going completely broke but you still need to be careful with spending in the future! Zambia has done something similar with its international debt.

Important Point: The restructuring is a step in the right direction, but not a magic solution. Zambia still needs sound economic policies and investment in key sectors for long-term success.

By: Dr. Larry L Mweetwa, PhD, BPharm (ZM), MSc ClinPharm (UK), MSc PM (UK), MSc PV (UK), DBA (ZM), PhD (UK), Senior UPND Carder.

WHAT THIS ACHIEVED DEBT RESTRUCTURING MEANS TO AN ORDINARY ZAMBIAN (MARKETEERS, BUS DRIVERS, MAIDS, CARPENTERS, PEASANT FARMERS, FISHERMEN, YOUTHS, WOMEN, A MAN OR WOMAN ON THE STREET)

By Mark Simuuwe

Firstly , it should be noted that debt restructuring is basically about changing the terms and condconditions of a loan ; Simply put , when you borrow money and you are required to pay back with 50 percent interest, under debt restructuring , you negotiate that you pay back with 2 percent interest . And if you are required to pay back in 3 years , you negotiate that you pay back everything in 10 years at a reduced 2 percent interest.

This is what our President and his team have been fighting for . The danger of paying back with a huge percentage in a short period is that , government will go back to failing to pay council workers , fail to pay retirees , fail to recruit teachers , fail to sustain free education , fail to attract investors, recruit nurses , and all health workers , accountants , engineers , computer scientists, economists, development experts etc .

If such a negotiation is successful, it would mean that instead of government paying so much money with huge interest in a short period of time, government will pay with less interest in a long period .

It means that government can now spend less on debt servicing , and spare money for growing the economy so that government expands the number of taxpayers to be able to even service the debt and finance many projects without borrowing .

In what sense does government grow the economy?

1. Increased CDF for more people to access empowerment;

2. ⁠government will easily increase CEEC for more citizens to benefit from empowerment; these citizens will then become taxpayers and even employ others ;

3. Government will increase on the number of youths to be recruited into government as teachers , nurses etc because government now has more money to pay salaries;

4. Government can now grow the economy through empowerment to be able to help more drivers access Taxis for Yango how are you ;

5. Government will be able to support more farmers under the FISP ;

6. Government will be able to normalize the economic performance of the country in the long run and reduce the cost of living including the cost of doing business ;

7. Government will be able to help more pupils on the school feeding programme especially in rural areas and be able to buy sanitary pads for the girl child so that most of them do not miss out classes ;

9. Government can now start controlling the price of mealie meal in the long run and reduce it , by ensuring that efforts put in place to regulate prices of commodities are reflective over time ;

10 . Government will now recruit more youths into ZNS , Army , ZAF , Correctional Services, Immigration, etc ;

11. Government can now find it easy to attract more investors who will in turn provide more job opportunities to youths and women and bring the much needed forex to stabilize Kwacha ;

12. Government can now enforce the budget with ease and improve salaries of workers ;

13. Government can now manage to support more fishermen to begin engaging in fish farming so that we have more food stuff which in turn trigger a reduced price of fish in the country ;

14. Call boys , our mothers and sisters selling in markets can now begin to see money in circulation and be able to access more medicine in hospitals;and

15. The cost of living shall now begin going down overtime ;

It should finally be noted that , debt restructuring does not mean all of a sudden everything goes down in prices because most of the stock imported is usually bought in bulk and a sharp drop in prices does not come immediately , but in a graduating manner ; the benefits are gradual but more predictable. Government also finds it easy to plan strategically over a period of time

GOD KNEW HH7 WILL HANDLE ZAMBIA’S PROBLEMS WELL.

By Editors

1. Edgar Lungu closed Indeni , HH’s govt opened.

2. Edgar Lungu imposed employment freeze , HH is employing.

3. Edgar stopped paying council workers they went into 7 to 15 months arrears , HH cleared paying all council workers.

4. Edgar Lungu failed to pay CDF , HH increased and he has been paying.

5. Edgar Lungu failed to run education, scrapped off meal allowances , HH reinstated them and extended meal allowances to 7 public universities.

6. Edgar Lungu failed to manage debt , which destroyed the economy with effects being felt today , HH has managed the first part of debt restructuring.

7. Edgar Lungu started failing to properly collect revenue, HH raised it to k100billion. ZRA just increased it’s revenue tax base.

8. Edgar Lungu failed to employ health workers , and only did replacement , HH is recruiting thousands every year.

9. Edgar Lungu failed to recruit in defense and education , HH is recruiting.

10. Edgar Lungu failed free education introduction, HH is doing it.

11. Edgar Lungu failed to run Mopani which produces copper , HH has found an equity partner.

12. Edgar Lungu failed to attract FDI , HH has brought over $3.8bn.

11. Edgar Lungu failed to do Kasama airport, HH did it : and construction of Airports in all provinces will be done this year.

12 . Edgar Lungu failed to run fisheries , HH has done it by restocking and producing more than 4million fingerlings.

13. Edgar Lungu failed to revamp Malls by failing to attract investment and shops started closing HH has revamped them.

14. Edgar Lungu failed to manage political violence , HH has managed.

15. Edgar Lungu failed to enact access to information bill , HH has done it , removed death penalty , removed criminal defamation of president.

16. Edgar Lungu failed to increase allocation to health , and only put it at k1.4 bn for purchase of medicines and medical supplies , HH has put it at k4.6bn as of last year.

17. Edgar Lungu failed to run a balanced cabinet , HH has done it.

18. Edgar Lungu failed to manage debt , HH Enacted debt management act no 15. Of 2022.

19. Edgar Lungu promised ZNS training for all grade 12s , he failed and HH introduced skills training under CDF and youths and women are being trained.

20. Edgar Lungu closed media houses , HH has not closed any media house.

21. Edgar Lungu went for council levies and his cadres, HH has given back authority to local authorities.

22. In Edgar Lungu’s citizens were killed through politics like Nsama , Mapenzi , Kasongo , Lawrence Etc , HH has brought sanity.

23. Edgar Lungu failed to pay 258,000 farmers , HH has paid all of them.

24. Edgar Lungu failed to pay retirees in government , HH cleared them and paid TAZAMA ex workers , together with Tazara workers.

25. In Edgar Lungu’s regime people stole social cash transfer , HH has increased number of beneficiaries.

26. Edgar Lungu failed to take advantage of DRC opportunities, HH has established electric vehicle battery manufacturing plant.

27. Edgar Lungu failed to run fertilizer production , HH enabled manufacturing plant at $138 million.

28. Edgar Lungu failed to take advantage of ZNS to grow the economy, HH bought 10 milling plants and have reopened farm blocks.

Research questions and solutions

1. Price of mealie meal

Solution: govt has started working towards reducing cost of producing maize by making fertilizer locally , planting more and introducing credit facilities.

2. Kwacha loss of value

Solution: govt reopening liquidated KCM , Mopani , exporting more agricultural products , and attracting foreign direct investment to grow more dollars

3. Fuel price – :

Solution: Opening Indeni to reduce shock , remove exercise duty , and bulk buying and improving Indeni by reconfiguration so as to make it a refinery to have new pipelines from Mozambique and Angola .

In the intricate world of debt restructuring, caution remains paramount as recent developments underscore the complexities and uncertainties inherent in international financial negotiations.

Reflecting on past instances, it becomes evident that premature celebrations have often been followed by setbacks. In October 2023, optimism surged when a deal with Eurobond bond-holders was announced as successful. However, this optimism was short-lived as the deal was abruptly revoked mere days later, leaving observers wary of premature conclusions.

The cautionary tone persists as stakeholders navigate through the complexities of debt restructuring. Before extending congratulations or demonstrating unwavering optimism, it is imperative to ensure that all facets of the deal align with the standards set forth by key entities. Paramount among these are the requirements set by the Official Creditors Committee, the International Monetary Fund (IMF), and adherence to the guidelines established by the G20 framework.

While progress is being made in negotiations, the road to a finalized agreement remains fraught with challenges. The need for transparency, accountability, and comprehensive evaluations of proposed deals is emphasized now more than ever. Stakeholders, including debtor nations, creditors, and international financial institutions, must proceed with a measured approach, cognizant of the complexities involved and the potential ramifications of premature announcements.

Emmanuel Mwamba, expressing his views on Facebook, emphasized the need for caution, highlighting the conditional nature of such announcements.

“I’ve always expressed caution to these announcements as they are steeped in conditional processes.For example, in October 2023, a deal was announced as successful with the Eurobond bond-holders. However, it was revoked a few days later.Similarly before we demonstrate optimism or offer congratulations we want to understand that all elements in the deal are acceptable to the Official Creditors Committee, the IMF and the meets the G20 framework standards.,” Mr Mwamba said.

The Facebook post by Emmanuel Mwamba serves as a reminder of the prudence required in navigating the turbulent waters of debt restructuring. Before optimism can be fully embraced, ensuring that all elements of the deal meet the stringent criteria set by key stakeholders is imperative. Only through a measured approach and rigorous scrutiny can meaningful progress be achieved in resolving the intricate issues surrounding debt restructuring.

USA SENATORS VISITING ZAMBIA

Senate Foreign Relations Committee, Subcommittee on African Affairs Chairperson, Christopher Andrew Coons is leading a delegation of Senators from the Committee.

Members of the Committee include; Democratic Party Cory Booker, New Jersey, Chair Jeff Merkley, Oregon Chris Coons, Delaware Brian Schatz, Hawaii Chris Van Hollen, Maryland, Tim Scott, South Carolina, Ranking Member Todd Young, Indiana John Barrasso, Wyoming Rand Paul, Kentucky.

Promoting partnerships with sub-Saharan Africa.

As chairman of the Senate Foreign Relations Committee Subcommittee on African Affairs, Senator Coons is focused on building mutually beneficial partnerships with countries in sub-Saharan Africa, especially in governance, security, trade and investment.

A strong U.S. foreign policy in Africa must be rooted in American values and aim to promote democracy and freedom, protect human rights, defend U.S. interests and forge sustainable and mutually beneficial economic partnerships.

Senator Coons’ priorities on the African Affairs Subcommittee include:

Promoting trade and investment. With seven of the world’s ten fastest growing economies located in sub-Saharan Africa, Senator Coons believes the continent is ripe with opportunity. He has introduced legislation and chaired hearings to create and save American jobs through greater U.S.-Africa trade and investment and will continue to advocate for a more aggressive strategy to expand U.S. exports to Africa.

This will allow the U.S. to compete more effectively with China, encourage sustainable economic growth in Africa and expand access to overseas markets for American – and especially Delaware – businesses.
Supporting good governance and democracy. Senator Coons has made it a priority to work with partners in Africa to encourage good governance and strengthen democratic institutions.

He has chaired hearings and emphasized the importance of broadening political participation, reducing corruption, ensuring fair electoral processes, and protecting equality, justice, and rule of law throughout the continent.

Supporting food security, global health and development programs. Senator Coons strongly supports U.S. investments to address food security and global health crises, and has held hearings highlighting the importance of these priorities.

He is the co-chair of the Senate Caucus on Malaria and Neglected Tropical Diseases and is a strong and vocal supporter of U.S. investments in international development. He strongly supports foreign assistance as a means of promoting U.S. development goals abroad, ensuring stability and preventing costlier military interventions down the line, as well as assisting those most in need.

Defending U.S. security interests. Senator Coons believes we must use all tools at our disposal to defend Americans against global threats and protect U.S. security interests abroad, including in Africa.

He supports working in partnership with our African allies to combat terrorism and counter narcotics trafficking, and promote regional stability, security, and peace.

THE MAST COMMENT

Mtolo Phiri should tame his arrogance and apologise for selling people’s maize!

Truth is always consistent and catches up even with the sweet-talkers, dribblers and the arrogant, hence the saying that, “You can run with a lie but you can’t hide from the truth. It will catch you.”

Somebody anonymous put it this way, “Yes. The truth told by victors prevails as the truth.
Can truth be hidden or suppressed? – Yes.
Can truth be hidden or suppressed for long: no. Point is, are people ready for that truth?

Duration of how long truth can be hidden depends on when majority of people become ready to accept and embrace it.”

In our case today, the truth we all knew and fears we had were finally confirmed at the knocking of the drought. The new dawn regime was warned and even beseeched not to sale our maize willy-nilly but to no avail. They chose to live the moment and cared less for future eventualities!

An Oromo proverb states that, “Choosing not to marry during the rainy season is your choice, but dying in the rainy season is God’s choice.”

Safety or happiness is not attained by chance but by choice. As John Mitchell aptly put it, “Our attitude towards life determines life’s attitude towards us.”

And that maize export galore has determined our fate, now we are begging the international community for food! This is what Lundazi

PF member of parliament Brenda Nyirenda is lamenting about. Debating President Hakainde Hichilema’s state of the nation address in parliament on Wednesday, Nyirenda said there is no human dignity in Zambia today.

“Zambia has been declared a hungry nation. When you move, you go into your constituency, calls which are coming, people who are visiting you, everyone is talking about hunger. Where have we gone wrong as a nation? What have we done wrong to end up to this level? We are checking the progress which has been made, where were we in 2021 and where are we today? Why should Zambia, honestly, get to the level of begging for food? What have we done wrong? We need to ask ourselves a question. This is not a question that begs an answer from the executive. It begs an answer from both the executive and us who are in the opposition,” she said. “The question that is there, did we offer enough checks and balances so that the Ministry of Agriculture could have done the correct thing? Did the government adhere to what the opposition was saying so that they could have averted this hunger which has come on us like a bandit, while we have to source for food from nations where we were exporting? Why were wrong policies being allowed on the floor of the House? Why did we allow exports as a country? It is wrong to rule a country in such a way. It is very wrong to take away food that belongs to your children and give it to others.”

Nyirenda said “never again should such a thing happen” as she suggested that the presidential speech should have “where apologies must be made that something has been done wrong.”

“Food was in… what happened? Why did the Ministry of Agriculture start exporting the food which we need so much today? It is very painful as a country that our dignity is now at stake. We cannot live in such a way and we are being called honourable members of parliament here? It is easy for us, we have eaten breakfast, they even called us for a break, and now we are going to have super where we are going. What about our people in the village? It is painful and such a thing should never happen again that you should take food, you go and sell it abroad and you start buying it at a higher price. Where is the dignity? For me, I find it very painful. I find it very painful that today we are a hungry nation,” Nyirenda said. “It is a shame on us that we are hungry, insala tayakwata umucinshi (there is no honour in hunger). If you are suffering, it is not healthy. The issue of hunger begs for a very good answer. We were called, we were voted for, we were brought into this House to defend this nation. We cannot allow ourselves to be hungry. It is painful to be hungry. We will not allow our people to be hungry because of wrong policies.”

Nyirenda added that Phiri made vows that “I am going to export all the maize! And here we are today.”

Phiri however stood on a point of order fuming that “I wish not to get into fights over maize.”

He pleaded with the Speaker to “please guide my friend (Nyirenda) not to debate like that.”

“Is she in order to engage me personally into a debate using my name to engage me into a debate which does not necessarily talk about hunger? Mr Speaker, may I be told if the maize that is so said to have been sold by me was paid for? I have indicated in this House that that maize was unpaid for,” he said. “We needed to sell it in order to pay for… the Minister of Finance is here. I went to his office so many times; [I asked] what about this maize? [He answered] sell the maize and pay the farmers. Is madam from Lundazi in order to honestly mislead herself… mislead members of the family of this chamber, the nation at large and the world that indeed we sold maize and now we are hungry? Is she in order to continue propagating something which is not necessary? Agriculture is a unifier. I wish not to debate in that way my dear sister, let’s debate properly. If I get emotional the way you are, we will confuse the world.”

Second deputy speaker Moses Moyo came to Phiri’s rescue telling Nyirenda to avoid personalising the debate.

“I think the honourable minister as he is executing his work, he is executing because he is duly in that office. As such, let us avoid personalising debate and also I think let us ensure that whatever we say is something that is truthful considering that the minister has been on the floor of the House and he mentioned how the purported exports were done and what led to that,” guided Moyo.

But Nyirenda said “the challenge which is there Mr Speaker is that when the opposition is trying to question some of the things, the executive must have bigger ears and a very small mouth so that whatever they say can sink in, and they can be able to digest it and later make good policies.”

We agree.

Mtolo and his boss must have bigger ears and a very small mouth so that whatever is said can sink in, and they can be able to digest it, and later make good policies. So far, the two have proved to have bigger mouths and small ears. And this uis not leadership at all! Wrong decisions were made and this regime must own up. They shouldn’t become emotional defending their mistakes and arrogance! Mtolo himself has proved to be very arrogant. During the first fertiliser procurement by the new dawn, President Hakainde Hichilema had to apologise on behalf of Mtolo. Where on earth would a boss apologise on behalf of his subordinate and that subordinate still chooses to remain arrogant? Mtolo’s arrogance is very annoying and he should never again dare defend it. We wish to remind him that our memories are not as short as his. We still remember every word he said on the floor of the House in defending his crazy maize exports, so why was he troubling Brenda on Friday? A normal person should just own up and apologise to the nation. Does Mtolo want his boss Hakainde to apologise again on his behalf? This is insolence of the worst kind.

Zambia External Bondholder Steering Committee Reaches Agreement with Zambia on Debt Restructuring

US and Europe, March 25, 2024

The Zambia External Bondholder Steering Committee (the “Committee”) is pleased to announce that it has reached
a conclusive agreement (the “2024 Agreement”) with the Government of Zambia (the “Government”) on a
restructuring of Zambia’s (i) US$750,000,000 5.375 per cent. Notes due 2022, (ii) US$1,000,000,000 8.500 per
cent. Notes due 2024 and (iii) US$1,250,000,000 8.970 per cent. Amortising Notes due 2027 (collectively the
“Eurobonds”).

This agreement follows the Government’s confirmation that the terms of the 2024 Agreement are compatible with
Zambia’s Official Creditor Committee (the “OCC”) assessment of comparability of treatment and the IMF’s
program parameters under the Second Review framework.

Since November 2023 when the OCC determined that the previous agreement-in-principle reached with the
Government (the “November 2023 AIP”) did not meet the requirements of the comparability of treatment
provisions set out in the memorandum of understanding (“MOU”), the Committee has continued to support the
Government’s efforts to pursue a restructuring on terms close to those of the November 2023 AIP, recognising that
some adjustments were required as that agreement was predicated on implementation of a restructuring before 31
December 2023.

While the 2024 Agreement provides some further debt relief beyond that provided for in the November 2023 AIP,
these additional concessions will allow for the-standing default on the Eurobonds to be cured, will support the
restoration of Zambia’s macro-economic and debt sustainability in the context of the IMF-financed program, and
were required to ensure the support of all key stakeholders including the IMF and the OCC in a timely manner.
Prompt implementation of a debt restructuring agreement with bondholders is not only in Zambia’s interests, but
the wider creditor community as a whole.

The proposed restructuring terms set out in the 2024 Agreement are based on the same structure as the November
2023 AIP. Two new Eurobonds (further described as Bond A and Bond B in the Government’s press release) will
be issued which provide future debt relief commensurate with Zambia’s economic progress in the next few years.
While the 2024 Agreement requires both additional debt reduction and net present value relief compared to the
restructuring terms agreed pursuant to the November 2023 AIP, it also includes enhanced repayment terms and
higher coupons on Bond B, in the event that Zambia’s debt carrying capacity, as assessed by the IMF and World
Bank’s Composite Indicator, moves to medium from weak or Zambia continues to meet or exceeds current IMF
projections as measured by exports of goods, services and fiscal revenues measured in US Dollars. The 2024
Agreement also includes agreement on certain non-financial terms, including a most favoured creditor clause that
will ensure that certain other creditors do not receive a better recovery in the restructuring on net present value
terms, a loss reinstatement clause if Zambia were to default during the term of the IMF program, and certain ongoing
information covenants for Zambia.

The Committee appreciates the collaborative and transparent discussions with the Government that have allowed
for this conclusive agreement to be reached.

A spokesperson on behalf of the Committee said: “We are pleased to have finally reached a definitive and
conclusive agreement with the Government that is supported by all stakeholders and which will, in due course,
restore full international capital markets access to Zambia and encourage long-term investment in the country, to
the benefit of all Zambians.”

The key elements of the 2024 Agreement are contained in the Government’s press release. Implementation of the
2024 Agreement is conditional on mutual agreement on deal documentation, and the objective is to fully implement
the agreement as promptly as feasible.

The Committee encourages all holders of the Eurobonds to carefully consider the terms of the Government’s
prospective offer in relation to the 2024 Agreement and to make their own independent appraisal of the merits and
risks of participation.

Members of the Committee include the following asset managers (acting either directly or on behalf of funds or
other accounts they manage): Amia Capital LLP; Amundi (UK) Limited; Farallon Capital Management, LLC;
Greylock Capital Management, LLC; RBC BlueBay Asset Management.

The Creditor Committee is being advised by Newstate Partners and Weil Gotshal & Manges (London) LLP
Questions can be directed to:

HIGHLIGHTS:

Zambia External Bondholder Steering Committee Reaches Agreement with Zambia on Debt Restructuring

Here are the highlights;

✅The Zambian Government has reached and concluded the debt restructuring with Eurobond holders over the country’s 3.5 billion United States Dollars it owes.

✅The Zambia External Bondholder Steering Committee announced that it had reached a conclusive 2024 agreement with the Government of Zambia on a restructuring of the country’s:

(i) US$750,000,000 5.375 per cent. Notes due 2022,

(ii) US$1,000,000,000 8.500 per cent. Notes due 2024 and

(iii) US$1,250,000,000 8.970 per cent. Amortising Notes due 2027 (collectively known as the “Eurobonds”).

✅This agreement follows the Government’s confirmation that the terms of the 2024 Agreement are compatible with Zambia’s Official Creditor Committee assessment of comparability of treatment and the IMF’s program parameters under the Second Review framework.

✅Since November 2023 when the OCC determined that the previous agreement-in-principle (AIP) reached with the Government did not meet the requirements of the comparability of treatment provisions set out in the memorandum of understanding, the Committee has continued to support the Government’s efforts to pursue a restructuring on terms close to those of the November 2023.

✅While the 2024 Agreement provides some further debt relief beyond that provided for in the November 2023 AIP, these additional concessions will allow for the-standing default on the Eurobonds to be cured, will support the restoration of Zambia’s macro-economic and debt sustainability in the context of the IMF-financed program, and were required to ensure the support of all key stakeholders including the IMF and the OCC in a timely manner.

✅Prompt implementation of a debt restructuring agreement with bondholders is not only in Zambia’s interests, but the wider creditor community as a whole.

✅The proposed restructuring terms set out in the 2024 Agreement are based on the same structure as the November 2023 AIP.

✅Two new Eurobonds will be issued which provide future debt relief commensurate with Zambia’s economic progress in the next few years.

✅While the 2024 Agreement requires both additional debt reduction and net present value relief compared to the restructuring terms agreed pursuant to the November 2023 AIP, it also includes enhanced repayment terms and higher coupons on Bond B, in the event that Zambia’s debt carrying capacity, as assessed by the IMF and World Bank’s Composite Indicator, moves to medium from weak or Zambia continues to meet or exceeds current IMF projections as measured by exports of goods, services and fiscal revenues measured in US Dollars.

✅The 2024 Agreement also includes agreement on certain non-financial terms, including a most favoured creditor clause that will ensure that certain other creditors do not receive a better recovery in the restructuring on net present value terms, a loss reinstatement clause if Zambia were to default during the term of the IMF program, and certain ongoing information covenants for Zambia.

✅The Committee appreciates the collaborative and transparent discussions with the Government that have allowed for this conclusive agreement to be reached.

✅The Committee encourages all holders of the Eurobonds to carefully consider the terms of the Government’s prospective offer in relation to the 2024 Agreement and to make their own independent appraisal of the merits and risks of participation.

✅Members of the Committee include the following asset managers (acting either directly or on behalf of funds or other accounts they manage): Amia Capital LLP; Amundi (UK) Limited; Farallon Capital Management, LLC; Greylock Capital Management, LLC; RBC BlueBay Asset Management.

✅The Creditor Committee is being advised by Newstate Partners and Weil Gotshal & Manges (London) LLP.

MIM

PRESIDENT MASISI OF BOTSWANA EXPECTED IN ZAMBIA ON A WORKING VISIT

The Ministry of Foreign Affairs and International Cooperation wishes to inform the nation that His Excellency Dr. Mokgweetsi Eric Keabetswe Masisi, President of the Republic of Botswana will undertake a Working Visit to Zambia from 26th to 27th March 2024.

This high level engagement is a follow-up to the Working Visit to Botswana by President Hakainde Hichilema in January 2024.

President Hichilema and President Masisi are scheduled to hold official talks in Livingstone on matters of mutual interest, focusing on bilateral, regional and international issues.

A key highlight of the visit will be the signing of Memoranda of Understanding between Zambia and Botswana in various sectors, which will be presided over by both Presidents. These agreements will further reinforce the foundation for fruitful collaboration and mutual growth between the two countries.

Among the engagements while in Livingstone, President Masisi will undertake a tour of one of Zambia’s tourist attractions, Mukuni Big 5, a wildlife conservation reserve located in Mukuni Village.

Botswana remains a strategic partner for Zambia, with longstanding relations between the two countries anchored on shared values and a common history.

This visit will offer a platform to reinforce the strong ties between the two countries while exploring new areas for cooperation in agriculture, trade, and tourism.

Additionally, it aligns seamlessly with President Hichilema’s bold Economic Transformation Agenda by providing avenues for valuable partnerships and joint ventures to bolster sustainable development.

President Hichilema has prioritized cooperation at regional level and the development of crucial infrastructure and processes, essential to improving trade facilitation and enhancing socio-economic integration.

To this end, President Masisi’s visit to Zambia will invigorate the existing ties and pave way for increased cooperation, reaffirming the commitment to promote common aspirations for development and prosperity.

President Masisi is expected to depart Livingstone immediately after his engagements.

Hon. Mulambo Haimbe, SC, M.P
ACTING MINISTER OF FOREIGN AFFAIRS AND INTERNATIONAL COOPERATION

The Evangelical Fellowship of Zambia (EFZ) has issued advice to religious leaders, urging them to refrain from advocating for regime change, citing concerns over its divisive impact on society.

Bishop Paul Mususu, Chairperson of EFZ, emphasized that it is not within the purview of the church to advocate for a change of regime, as the decision lies with the Zambian people themselves. He stressed the importance of unity and cautioned against actions that could sow discord among citizens.

Speaking at the induction ceremony of Eddy Jibusha as Deputy Bishop of the Evangelical Church, Bishop Mususu underscored the pivotal role of the church in providing credible checks and balances to the government. He emphasized that rather than advocating for regime change, the church should focus on offering constructive solutions and guidance to the government.

Bishop Mususu reiterated that the responsibility of choosing leaders rests solely with the electorate and not with religious institutions. He urged religious leaders to uphold the principles of impartiality and to refrain from engaging in partisan politics that could undermine the unity of the nation.

The EFZ’s stance reflects a commitment to promoting peaceful coexistence and stability within Zambia, emphasizing the importance of respecting democratic processes and institutions in effecting change.The Evangelical Fellowship of Zambia (EFZ) has issued advice to religious leaders, urging them to refrain from advocating for regime change, citing concerns over its divisive impact on society.

Bishop Paul Mususu, Chairperson of EFZ, emphasized that it is not within the purview of the church to advocate for a change of regime, as the decision lies with the Zambian people themselves. He stressed the importance of unity and cautioned against actions that could sow discord among citizens.

Speaking at the induction ceremony of Eddy Jibusha as Deputy Bishop of the Evangelical Church, Bishop Mususu underscored the pivotal role of the church in providing credible checks and balances to the government. He emphasized that rather than advocating for regime change, the church should focus on offering constructive solutions and guidance to the government.

Bishop Mususu reiterated that the responsibility of choosing leaders rests solely with the electorate and not with religious institutions. He urged religious leaders to uphold the principles of impartiality and to refrain from engaging in partisan politics that could undermine the unity of the nation.