2023-10-15 16:14:40
At each meeting of the World Bank and the International Monetary Fund (IMF), eyes turn to Zambia, the first country to default in the wake of the crisis linked to the Covid-19 pandemic. Its situation makes it possible to measure the progress of negotiations around debt restructuring, made difficult and tortuous since the rise of new creditors such as China and private investors.
According to the latest IMF figures, almost half of poor countries suffer from this burden. The good news, announced during the annual meetings of the IMF and the World Bank, which just ended on Sunday, October 15, in Marrakech, is that Zambia is close to an agreement. However, this does not provide for any cancellation: his creditors will just give him additional time to repay it. Which still amounts to a reduction. Bad news: the difficulties are only just beginning for her. “Debt rescheduling is a good thing but it is not enough to offer a better life to the young people of my country,” noted Situmbeko Musokotwane, the Zambian Minister of Finance, in Marrakech. “We need to regain growth to create jobs. »
Problem: where to find the resources to revive the economy? Out of one euro of budget revenue, Zambia spends 90 cents to pay salaries and repay debt and, like many other poor countries, it can no longer borrow. “We therefore opened the window wide to the private sector because we had no other choice,” explained the minister. In a few months, the country signed six public-private partnerships for the construction of 800 kilometers of roads. Mining concessions were sold in 2023 to private investors for more than $3 billion (2.85 billion euros). And hundreds of thousands of hectares of agricultural land are for sale.
Decline in public spending per capita
Other poor countries find themselves in the same situation as Zambia, even though they do not have high debt. In sub-Saharan Africa, this does not exceed 50% of gross domestic product (GDP), compared to 70% at the turn of the 2000s, and external debt is now less significant than domestic debt, contrary to what was observed in the past. And, yet, these countries suffer because their loans, often denominated in foreign currencies, are much more expensive to repay, due to rising interest rates and the appreciation of the dollar.
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