Zambian President, Edgar Lungu has announced that for a period of six months starting in October, interest payments to private investors will be suspended due to the adverse economic effects of the COVID-19.
The decision comes after a long deliberation by the leaders as the nation owes at least $10 billion in foreign debt and will now become the first African nation to stop payments, Australia took a similar step in August.
Although wealthy countries have offered a moratium to poorer nations in terms of debt repayment, there is the concern that it will be difficult for such nations to secure future loans in the future.
Zambia’s public debt increased to 80 per cent in 2019 from 35 per cent in 2014.
