Foreign PolicyForeign Policy

An era of debt crisis catastrophe is dawning

By Mark Malloch-Brown

21 Jun 2023 · 4 min read

informed Summary

  1. Zambia, once a promising African nation, has been crushed by debt and economic turmoil. The country defaulted on its debt in November 2020, leading to soaring costs of essentials and widespread job losses.

Consider Zambia, and a tale of great potential being crushed by the millstone of debt. Until recently, this southern African country with a population of 19 million had for three decades been (for the most part) a functional multiethnic, multi-party democracy. With its wealth of raw materials and its booming capital, Lusaka, it long looked set to be one of the more successful states of Sub-Saharan Africa. But reckless borrowing, combined with the economic fallout of the COVID-19 pandemic, saw Zambia default on its debt in November 2020. The cost of essentials such as food, energy, and transportation soared; businesses laid off workers; public-sector salary payments were delayed. The country has been in economic limbo ever since.

As of this article’s publication, the Zambian government is reportedly—at long last—on the verge of a restructuring agreement with its bilateral creditors. Whereas Silicon Valley Bank was bailed out in three days, Zambia has waited almost three years.

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