CTPD hails Zambia’s strong Eurobond buyback Performance

LUSAKA – The Centre for Trade Policy and Development (CTPD) has extended its commendation to the Zambian Government for the remarkable success of its recent Eurobond buyback initiative, which secured an impressive 97.85 percent participation rate. This high level of engagement from bondholders is being hailed as a pivotal moment in Zambia's protracted efforts to restructure its substantial external debt, a process that has weighed heavily on the nation's economic prospects for several years. The CTPD, a prominent economic think tank, underscored the significance of this achievement, noting that it not only demonstrates the government's steadfast commitment to resolving its debt quagmire but also signals a renewed confidence among international creditors. For a country that defaulted on its sovereign debt in 2020, achieving such a high participation rate in a buyback offer is a strong indicator of progress in negotiations and a testament to the viability of the proposed debt treatment plan. The buyback is a key component of Zambia's broader debt restructuring strategy, which aims to create fiscal space for essential public services and stimulate economic growth. This development comes after arduous negotiations with various creditor groups, including official bilateral creditors under the G20's Common Framework and private bondholders. The Eurobond buyback, effectively reducing the principal amount of outstanding bonds, is expected to alleviate immediate pressure on the national treasury by lowering future interest payments and staggering maturities. This move is crucial for Zambia, which has been grappling with high debt service costs that have diverted resources from critical sectors such as health, education, and infrastructure development. The CTPD further highlighted that the successful buyback is likely to enhance Zambia's creditworthiness in the international financial markets. Improved credit ratings could lead to lower borrowing costs for future governmen