LUSAKA, June 29 (Xinhua) -- Zambia will be put at a high risk to borrow from the international market if it defaults on payments on the current Eurobonds, an economic expert said on Thursday.
Finance Minister Felix Mutati said on Wednesday that the country may default on the payment of the Eurobonds it acquired at the time of their maturity because of challenges of debt sustainability, domestic revenue mobilization and fiscal consolidation.
The government acquired three Eurobonds of 750 million U.S. dollars, 1 billion dollars and 1.25 billion dollars which are set to mature in 2020, 2024 and 2027 respectively.
Lubinda Haabazoka, a Senior Lecturer of Business Studies at the Copperbelt University (CBU), said failure to repay the Eurobonds will put the country in an awkward position as it may face difficulties in borrowing from the international market in future.
He said failure to repay the Eurobonds will result in country borrowing at high interest rates in future as lenders will be skeptical about the country's ability to honor its debts.
"This will also erode investor confidence and it is unfortunate that we have found ourselves in this trap. It also shows that the government was borrowing without planning how it will amortize the debts," he told Xinhua in an interview.
