Optimism at Bond holders vote, IMF rep appointment

BUUMBA CHIMBULU writes
@SunZambian
THE Economics Association of Zambia (EAZ) has expressed cautious optimism that something good will come out of the voting meeting for bondholders set for November 13, as more Chinese creditors may defer the country’s debt.
EAZ national secretary, Mutisunge Zulu, banked the cautious optimism on the appointment of the Preya Sharma as International Monetary Fund (IMF) representative in Zambia as well as deferring of the country’s debt by the China Development Bank.
Last month, the IMF appointed Ms Sharma as Zambia’s resident representative taking over from Alfredo Baldini who was deployed back to the fund two years ago.
During the same month, Zambia reached a deal to defer debt repayments that were due in October, 2020 on a loan from the China Development Bank.
“This is coming off the back that within these two weeks we could see more Chinese banks coming to defer Zambia’s debt which is exactly what we have been pushing for, we are seeing pushing, and we are seeing signs of positivity.
“China Development Bank debt deferment is a positive sign, this is happening in the lifeline period, the optimism is that there could be other Chinese banks that will come through and it is slowly sending signals to the bondholders,” Mr Zulu when he appeared on the Anakazi Banking Online Conversations.
Mr Zulu noted that Zambia, from June this year, had stepped up its quest towards its fiscal fitness.
Zambia has US$3 billion of Eurobonds outstanding and owes US$2 billion to commercial banks, US$2 billion to the IMF and World Bank and another US$3 billion to China.
The bondholders who were supposed to vote on Zambia’s request last month postponed their meeting to November 13 after failing to reach quorums.
Mr Zulu said: “it might look like failing to reach quorum when it was actually in our favour because it extended the period. There is a lot happening between now and November 13.”
“I am cautiously optimistic that come the 13th of November, something good will come out. I do not know what it is exactly, but I know that between now and then, there is a lot happening.
“I look at the macroeconomics, I look at the trends, I look at the exchange rate, the question is how do you know the Central Bank is buying dollars to prepare for that payment?,” he said.