Zambia’s failure to repay its euro bonds in 2020 is having a detrimental impact on the country’s economic growth, according to economist Michelo Maunga. The repercussions of this debt default are still being felt, and Zambia is currently facing a number of economic challenges as a result.
Zambia’s economic growth is being hindered by its inability to repay Euro bonds. The Ministry of Finance reports that the country’s total public debt stock, including interest arrears, reached $32.8 billion at the end of last year, with $18.6 billion being external debt. As of June 2022, the total debt, including interest arrears, has increased to $32.5 billion, with $17.5 billion being external debt. This failure to repay its debts is having a negative impact on Zambia’s economic growth.
Zambia’s failure to repay its Euro bonds has had a detrimental effect on its economic growth. As the first African country to default during the COVID-19 pandemic, Zambia has been forced to restructure its debt. However, this default has created a vicious cycle where the country must continue to borrow in order to finance its economic development. In an interview with Phoenix News, Mr. Maunga explains the challenges that Zambia is facing as a result of its default.
The decision to suspend interest payments has caused a financial crisis, resulting in increased risk perception and other negative impacts on the economy.
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