Economist Chibamba Kanyama says the cancellation of undisbursed loans by government totaling $2 billion, in projects financed by commercial loans is welcome despite the potential penalties that may arise depending on conditions attached to the contracts.
Mr. Kanyama tells Phoenix News that Zambia cannot go into infrastructure development using borrowed resources which may even be a challenge to service.
He is optimistic that experts within government have already done the cost benefit and evaluated the decision taken.
Mr. Kanyama has since advised government to ensure resources saved from this decision go towards poverty alleviation, saying Zambia now has an opportunity to prioritize decisions that can create an impact on the people.
Government through the Ministry of Finance recently announced that Zambia has engaged lenders to facilitate the formal cancellation of over $2 billion in undisbursed loans as part of measures to address its debt challenges.