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•     Emergency finance must not add to debt burdens

•     Process to reduce debt to a sustainable level in future is needed

On this World Health day when the world is supposed to celebrate the work of nurses and midwives and remind the world leaders of the critical role they play in keeping the world healthy amid an unprecedented global crisis, more than 100 organisations are calling for developing countries’ debt to be cancelled to fight the Covid-19 health and economic crisis.

Cancelling all debt payments owed by low-income countries to other governments, multilateral institutions and private lenders would free up to US$ 25.5 billion to fight coronavirus in 2020 alone. Extending the cancellation to apply to payments due in 2021 would make another US$ 24.9 billion available to help save lives now and in the future.

The IMF and the World Bank have called for debt payments by the poorest countries to other governments to be suspended, but with the effects of the pandemic likely to last for years, delaying rather than cancelling payments won’t solve the problem.

Cancellation also needs to apply to all creditors, including bilateral, multilateral and private lenders, to ensure freed-up money goes to support the pandemic response, and not to pay off other debts.

Mr. Eugene Kabilika, the Executive Director for Caritas Zambia, joining the world call to cancel debt said: “Thousands, if not millions of Zambians are already facing devastating health, social and economic challenges and the onset of the Covid-19 pandemic, will only make the situation worse. Permanently cancelling upcoming debt payments owed by Zambia would be the fastest way to free up existing public resources to tackle this unprecedented crisis and save lives”.

External debt repayments in Zambia has been diminishing resources meant for poverty reduction, which has exerted a significant crowding-out effect on social expenditures more especially in the health sector which is very critical in this Covid-19 pandemic period. External debt overhang in Zambia, just like in many other African countries continues to constitute a serious obstacle to fight Covid-19 pandemic which has both developmental and economic growth effects.

“The suspension on debt payments called for by the IMF and World Bank will fall short of this goal if it doesn’t apply to all lenders, and only postpones payments. Full cancellation of all external debt payments is critical, along with emergency finance that doesn’t add to debt burdens. This must be followed up with a more comprehensive and long-term approach to debt crisis resolution.”In addition, “it is important to do everything possible to help low-income countries avoid a build-up of unsustainable debt, and that the IMF and Bank should be a leading force toward achieving this objective. This will help Zambianot to fall off track significantly towards attaining the Sustainable Development Goals (SDGs). It will require Full cancellation and greater use of grant financing rather than availing more money for borrowing, especially for poorest and debt vulnerable countries. Availing grants is an important first step in this direction of fighting and stopping the Covid-19 pandemic”

Cancellation of debt service, up to an additional US$ 73.1 billion of emergency finance will be needed to help low-income economies as they respond to the crisis in 2020. This must be provided through grants, rather than loans, to stop recipient countries getting even deeper into debt. Addressing the long-term debt pressures on developing countries also requires decision-makers finally agreeing reforms to the international system for dealing with sovereign debt restructuring, once the acute Covid-19 crisis has passed. 

A joint letter also signed by Caritas Zambia - will be sent to governments and their representatives at the IMF and World Bank in due course, it calls for:

•     The permanent cancellation of all external debt payments due in 2020 by developing countries, with no accrual of interest and charges and no penalties. 

•     The provision of additional, fresh emergency finance that does not create more debt.

•     Debt cancellation and new financing to be provided free of demands for market-friendly and austerity-focused policy reforms in developing countries.

•     Measures to be put in place to protect developing countries from lawsuits when ceasing 2020 debt payments.

•     A process under UN auspices to be agreed in the longer term, to support systematic, timely, and fair restructuring of sovereign debt.

END

Download a signed copy here https://caritaszambia.org/index.php/publications/general/file/150-developing-countries-debt-must-be-cancelled-to-tackle-coronavirus-crisis

Caritas Zambia

Catholic Secretariat

Box 31965

Plot BRT 6, Kabulonga Road

Lusaka

Signed

7th April, 2010

 

NOTE TO EDITORS:

•     Signatories of the statement include the African Forum and Network on Debt and Development (Afrodad), Asian Peoples’ Movement on Debt and Development (APMDD), Latin American Network on Debt, Development and Rights (Latindadd) and European Network on Debt and Development (Eurodad). Other signatories include Jubilee Debt Campaign UK, USA and Germany, Oxfam, ActionAid, International, The ONE Campaign, Cafod, Save the Children and Global Justice Now, as well as the Mozambique Budget Monitoring Forum, Budget Advocacy Network in Sierra Leone and CUTS International, Zambia.

•     African finance ministers have called for a suspension of all interest payments in 2020, and all principal and interest payments by fragile states.

•     Urgent calls for debt relief have also been made by the United Nations Secretary-General, the United Nations Conference for Trade and Development, the Prime Ministers of both Pakistan and Ethiopia, the Ecuadorian Congress and Vatican Cardinal Luis Antonio Tagle.

This statement calls for:

•     Multilateral institutions, including the IMF and World Bank, should offer an immediate cancellation of all principal, interest and charges for the remainder of 2020 for all countries in need, and most urgently for all PRGT and IDA countries. 

•     The IMF and World Bank should urge any country ceasing multilateral and/or bilateral debt payments to also cancel payments to private external lenders. Any new IMF and World Bank finance should be in the form of grants not loans, and require other lenders to reprofile the debt where sustainability is uncertain or restructure their debt where it is unsustainable,  to help ensure money is used to support public policy priorities in response to the COVID-19 crisis, rather than to repay other lenders.

•     Lender governments, both Paris Club members and others such as China, Saudi Arabia and Kuwait, should cancel all principal, interest and charges for the remainder of 2020 for all countries in need, and most urgently for all PRGT and IDA countries. Ideally, a debt cancellation should be coordinated between lenders but should not wait for them all to agree. 

•     The G20 should support moves by any country to stop making payments on debt to private external lenders. 

•     Key jurisdictions, especially the UK and New York, should pass legislation to prevent any lender suing a government for stopping debt payments in 2020. 

•      Debt payment cancellations and additional finance should be free of economic policy conditionality promoting privatisation, deregulation and trade liberalisation. The crisis has been caused by exogenous shocks: developments over which countries in the global south had no control. 

•     Debt payment cancellation and additional finance should be designed specifically to bolster public expenditure targeted at protecting the rights and needs of populations, especially to maintain and increase social protection and health spending in response to COVID-19 and 

The statement also calls for longer-term measures: 

•     The creation through the United Nations of a systematic, comprehensive and enforceable process for sovereign debt restructurings.

•     The IMF to introduce clear guidelines on when a debt is unsustainable, and follow its policy only to lend to countries with unsustainable debts if there is a default or debt restructuring.

INTRODUCTION

The Zambia government created the Youth Development Fund (YDF) in 2000 in order to address the issue of youth unemployment by encouraging young people who could not find formal employment to pursue entrepreneurship and self-employment. Zambia has high rates of youth unemployment. In 2014 approximately 10.5% of young people aged 18-35 were unemployed compared to 7.4% of general unemployment rate (Central Statistical Office, 2015). The challenge of high youth unemployment remain of great concern, especially that Zambia is a youthful country whereby 80% of the population falls below the age of 35 (Central Statistical Office, 2012). The problem of youth unemployment has been aggravated by the fact that economic growth in the past 14 years has not been very inclusive. Therefore, the introduction of the YDF is a good action by Zambia in addressing the unemployment challenges. This introduction of this empowerment program is in line with the National Youth Policy objectives of 2015, which are aimed to;

. Promoting active participation of youth in socio-economic development of the country.

. Encourage the out of school, marginalized and unemployed youth to venture into sustainable and viable income.

. Promote rural development

. Provide business support services for sustainable youth enterprise development

. Promote the development of competitive sustainable and growth-oriented citizen-owned youth enterprise.

It is worth noting that since the YDF was created, about 19 years down the line, there hasn’t been much to show for it in terms of tangible results of youth empowerment from this fund due to a number of factors and challenges faced in the implementation of this fund. For instance, according to the study and evaluation of the programme (YDF) done by the Zambia Institute for Policy Analysis and Research (ZIPAR) in 2018, it was concluded that the programme failed to achieve its objectives. “The evaluation found that the YDF had only created a total of 742 paid jobs from 2011 to 2015. Compared to the amount of resources that were invested in the YDF, the created jobs did not sufficiently contribute to reduction in the high levels youth unemployment. Additionally, the welfare of the beneficiaries did not also improve compared to that of the non- beneficiaries”, ZIPAR study concluded.

The entire Submission on the Youth Development Fund can be found and downloaded here https://caritaszambia.org/index.php/publications/key-papers/file/149-submission-on-the-youth-development-fund

SUBMISSION TO THE COMMITTEE ON AGRICULTURE, LANDS AND NATURAL RESOURCES OF THE NATIONAL ASSEMBLY ON ZAMBIA’S RESPONSE TO THE IMPACT OF CLIMATE CHANGE ON THE AGRICULTURE SECTOR FROM THE ZAMBIA CLIMATE CHANGE NETWORK

DATE: 21st NOVEMBER 2019

BACKGROUND

Globally, climate change has become a challenge affecting many developing nations including Zambia. The impacts of Climate Change are usually adverse for developing nations due to the high levels of vulnerability coupled with low adaptive capacity. Climate change threatens the ability of countries to meet their developmental goals. Effects of climate change include drought, flooding, extreme temperatures affecting key sectors of national development such as energy sector, food security, health, water sources, industrial processing among many others. The agriculture sector is the most vulnerable sector to climate change effects. The Zambian government has made an effort to address these effects by coming up with mitigation and adaptation strategies.

The effect of Climate Change is already affecting temperatures and precipitation in Zambia. Warming has been especially noticeable during the winter months. According to Zambia's Meteorological Department, the 2016 high temperatures ranging from 30°C to 38°C across the country attest to the fact that was established in 2006 of increasing temperatures. Furthermore, Zambia's average annual rainfall decreased by an average rate of 2.8 mm per month per decade since 1960, primarily due to decreases in rainfall from December to February and this has greatly affected crop production and household food security. Some communities in rural areas are in chronic food deficit and always face moderate food insecurity due to low production and high levels of poverty. According to the Disaster Management and Mitigation Unit’s (DMMU) Vulnerability Assessment Committee’s 2019 report (ZVAC), about 2.3 million people in Zambia are likely to face acute food insecurity in the projected period of October 2019 to March 2020.

Crop production is threatened by Climate Change due to changes in rainfall patterns and temperatures. Apart from affecting crops, the rising temperatures and associated decreases in rainfall have also reduced foliage for cattle and other animals that depend on grass for their survival. Households that depend on cattle for their livelihoods face difficulties in sustaining their livelihoods when their livestock die. They become vulnerable to Climate Change impacts as a result of reduced livestock that normally is an alternative to crop production and income.

Other adverse effects of Climate Change include loss of natural environment, damage to infrastructure and disruption of biodiversity. According to the 2011 study on the economic impacts of Climate Change, a GDP loss of USD 5 billion is estimated over a 10 – 20 year period. An assessment of potential climate impacts shows that they will seriously undermine the efforts to improve the livelihoods of Zambians if left unaddressed.

The entire submission to the Committee on Agriculture, Lands and Natural Resources of the National Assembly on Zambia’s response to the impact of climate change on the agriculture sector by the Zambia Climate Change Network can be found and downloaded at https://caritaszambia.org/index.php/publications/key-papers/file/148-zambia-s-response-to-the-impact-of-climate-change-on-the-agriculture-sector-from-the-zambia-climate-change-network

About CARITAS Zambia

CARITAS Zambia is a Catholic Organization that is an integral structure of the Zambia Episcopal Conference (ZEC). The Episcopal Conference (or Bishops Conference) is a permanent grouping of Bishops of a given nation or territory that jointly exercises certain pastoral functions on behalf of the Christian faithful of their territory. This they do to promote the greater good which the Church offers humankind

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Contact & Support

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