Reaction to Zambia’s Eurobond Debt Default

News of Zambia’s request to postpone payments on three Eurobond notes prompted immediate reactions from stakeholders in the financial services sector, economic policymakers and journalists. 

Here’s a sampling of the reactions on Twitter:

“Sad. It’s important to remember that (a) Zambia’s debt position was already precarious long before COVID and (b) several, I mean SEVERAL, people warned against the govt’s lax approach to debt contraction and management.” — Zambian journalist Chipo Muwowo (@CHIPMUWOWO)

“The Financial Times reports that Zambia is heading for debt default. We urgently need #china + private creditors to join a structured debt reduction operation – time to convert debt liabilities into investments in health, education and the battle vs COVID.” — Kevin Watkins, chief executive of Save the Children (@KEVINWATKINS)

“With Zambia halting interest payments on its Eurobonds, good moment to reread this: Zambia was a model in Wall Street’s rush to issue debt for the poorest nations. Now it’s a case study in how debt load left developing economies ill-prepared for COVID-19.” — Gabriele Steinhauser, deputy Africa bureau chief for the Wall Street Journal (@GKSTEINHAUSER)

“Zambia defaults … a long time coming. Before COVID, investors had hoped it might hold on until elections in 2021 and then maybe, just maybe, default might be avoided. But after running up so much debt this past decade … under a president who wanted to spend not save …” — Charlie Robertson, global chief economist at Renaissance Capital (@RENCAPMAN)

“We knew this was coming and had been warning our clients about this for some months now. Zambia faces a severe macroeconomic and fiscal situation aggravated COVID-19 crisis, exacerbating debt #servicing risks.” — Theo Acheampong, economist and political risk analyst (@MYTHEOZ)

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The post Reaction to Zambia’s Eurobond Debt Default appeared first on The China Africa Project.



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