ActionAid Speaks Out On Debt Restructuring Costs

ActionAid Country Director Nalucha Nganga Ziba has spoken out in reaction to news that the Government has hired Highgate Advisory Limited as its communications advisor for the debt restructuring process underway. 

Few would question the need for debt restructuring. The Government owes an estimated US $12 billion in external debt and around K26.2 billion in domestic arears. In November 2020 Zambia defaulted on its sovereign debt after a missed payment worth $42.5 million on one of the Eurobonds contracted.  

However, the appointment of Highgate to support the process at a cost of over $300,000 has been questioned in light of the fact that the government has already hired French firm Lazard Feres in a contract worth a maximum of US$5 million for work over three years. 

“The hiring of Highgate Advisory Limited as the government Communications advisor for the debt management process at a total cost of more than three hundred thousand pounds is not economical,” Nalucha Nganga Ziba writes. 

“ActionAid is of the view that public debt restructuring communication services should be done either by Lazard or the government through the Ministry of Finance with help from Lazard our public debt restructuring consultants to avoid replication of work and save the much-needed public resources. Our expectation is that Lazard must be able to communicate to lenders on behalf of the Zambian government or guide the Zambian government with communication to lenders,” she continued.  

“As a country, we cannot afford or continue making irrational fiscal decisions amidst fiscal challenges. We are already spending five million dollars on Lazard, and now over three hundred thousand pounds towards the same process. There is need for the government to be more prudent in the way they are managing public resources; and acquiring of public debt restructuring advisory related services is not exceptional to guarantee adequate public service delivery especially in the wake of Covid-19.” 

“We have also observed that, there are significant public concerns and queries around the registration status of Highgate Advisory Limited. In this regard, we would like to urge the government not only to clear the public concerns but also endeavor to embrace the spirit of transparency regarding the procurement of similar services in the future and more importantly in all its socio-economic decisions on behalf of the Zambian people,” she concluded.