Zambia's debt default

Zambia defaulted on some of its debt last Friday and there are concerns about where the country is headed, with some creditors suggesting that the government is failing to engage in constructive talks about debt restructuring.

If so, the developmental consequences could be severe, with Zambia's ability to borrow severely curtailed and the associated costs to healthcare and education budgets being particularly damaging.

The country has asked to defer interest payments until next year, but creditors haven't agreed to this, and there's a risk that if the country defaults it could have severe macroeconomic implications.

Coronavirus has aggravated pre-existing financial pressures, including a $12bn external debt load. Action Aid (below) argues that pursuing the debt at present is immoral. Is there a case for debt relief because of the impact of the pandemic?

More here from the Financial Times: Zambia on brink of default after lenders reject debt relief request