Summary:
The African Finance Ministers held a press conference in Marrakech to discuss the growing issue of debt vulnerabilities in Africa. Minister Situmbeko Musokotwane of Zambia announced that they have reached an agreement with the Official Creditors on debt restructuring, a positive step towards improving their economic situation. He emphasized the need to attract private investment and take advantage of Zambia’s natural resources to uplift living standards. Minister Tahir Hamid Nguilin of Chad also acknowledged their commitment to debt restructuring and highlighted the importance of cooperation from creditors in making debt sustainable. Overall, both ministers expressed optimism about the future and the potential for economic growth in their respective countries.
Expanded summary:
During the press conference, Minister Situmbeko Musokotwane of Zambia shared the good news of reaching an agreement with Official Creditors on debt restructuring. This agreement formalizes the understanding between Zambia and its creditors that had been discussed since June. While debt relief is helpful, Minister Musokotwane emphasized the importance of attracting private investment and utilizing Zambia’s natural resources, such as copper, nickel, and manganese. By creating a conducive environment for investors, the government aims to stimulate economic growth, job creation, and increased tax revenues.
Minister Tahir Hamid Nguilin of Chad expressed his gratitude towards the support received from the IMF, the Paris Club, and creditors, which has enabled Chad to successfully restructure its debt. He stressed their commitment to improving the business climate, increasing revenue, and implementing good public financial management practices. With the help of all their creditors, Chad’s debt has become sustainable, and the country has witnessed positive macroeconomic improvements. Minister Nguilin viewed debt restructuring as a lesson learned, noting that there is life after debt restructuring and expressed hope for future funding from bilateral and multilateral partners.
In response to a question regarding lessons learned from the debt restructuring process, Minister Musokotwane acknowledged that while their process took less than three years, it was longer than ideal. He attributed the prolonged period to a learning process for all parties involved, including creditors, themselves, and the international community. Minister Musokotwane advised other countries facing debt vulnerabilities to engage early in the process and not shy away from seeking assistance. He encouraged colleagues in similar situations to learn from their experience and engage with creditors to find sustainable solutions.
Regarding the issuance of green bonds, Minister Musokotwane explained that it is part of their strategy to promote a greener economy. These bonds can be issued by both the government and private sector, and they aim to fund projects related to renewable energy sources like solar power. However, the minister did not provide specific details or timelines for green bond issuance. Lastly, in response to the question about the impact of El Niño on food prices, Minister Musokotwane did not directly answer but indicated that addressing food security is an important concern for the government.
