The Economics Blog

On the 13th of November, Zambia became the first African country to default on its external debt payments since the pandemic started.

The Southern African country failed to pay its $42.5m (£32.3m) interest payment on $1bn worth of Eurobonds maturing in 2024. Many have alluded to the fact that the country’s failure to pay its debt is one of the inevitable costs of the COVID-19 pandemic. But it is an outcome of the government’s negligence and poor fiscal management practices over the years.

According to the Central Bank Governor, Christopher Mvunga, the country deliberately chose not to pay because it wanted to treat all creditors fairly. “It is not that we could not pay. It’s just that if we pay one creditor, then we need to pay all the creditors”, he said

Zambia External Bondholder Committee has also blamed the government for a lack of transparency and concealing the…

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