Page 13 - AfrElec Week 04 2023

AfrElec ENVIRONMENT AfrElec

World Wildlife Fund floats plan to resolve

Zambia’s $17bn debt crisis

ZAMBIA ZAMBIA has confirmed receiving a new pro- ocean protection.
posal to help ease its debt burden through “We will be considering all debt restruc-
directing amounts written-down towards nature turing options that are in the framework (G20
conservation and climate change response pro- Common Framework) which falls within the
jects, Reuters reports. DSA (debt sustainability analysis) parameters…
If adopted, the debt-for-nature swaps pro- and that are acceptable to all parties,” Zambia’s
posed by the World Wildlife Fund (WWF) could finance ministry added.
free up between $750mn and $1bn that could, The International Monetary Fund (IMF),
in turn, be spent on environment protection which is involved in the Zambia debt treatment
projects in the low-income southern African drive, supports debt-for-nature swaps. In a
country. release on December 14, 2022, IMF managing
“The Ministry of Finance and National Plan- director Kristalina Georgieva, due in Zambia
ning has received a proposal from the World next week, said the swaps can assist in upgrading
Wildlife Fund regarding the consideration of countries’ sovereign credit rating, as was the case
debt-for-nature swaps,” the ministry told Reuters in Belize, which makes government borrowing
in an emailed response to questions. cheaper.
Zambia defaulted on its obligations in 2020 Swaps could even create additional revenue
and they now amount to more than $30bn. for countries with valuable biodiversity by allow-
About $17.3bn of the debt is owed to external ing them to charge others for protecting it and
creditors such as China and the Paris Club. The providing a global public good, she said.
country is negotiating for debt relief under a However, Georgieva added: “They are
restructuring vehicle introduced by the G20 alli- unlikely to provide a universal solution for coun-
ance of industrialised nations in 2020, called the tries struggling with debt or confronting climate
Common Framework. The WWF initiative is change or nature loss. And they should not come
not part of the framework. at the expense of traditional debt relief or conces-
The country is grappling with deforestation, sional finance.”
frequent droughts and the impact of climate WWF’s Zambia country head, Nachilala
change. President Hakainde Hichilema’s govern- Nkombo, noted the growing environmental and
ment, in December 2022, started rationing elec- climate change challenges in the country.
tricity for up to 12 hours daily due to a low water “That is somebody’s job, somebody’s food and
level at its main hydropower facility following a that is the country’s future at risk,” Nkombo said,
drought blamed on climate change. also underscoring the threat to the country’s ele-
A debt-for-nature swap, Reuters wrote, phants, lions and other vulnerable species. “If we
helped both Belize and Seychelles secure write- lose them the impact goes far beyond Zambia, it
downs that put tens of millions of dollars into would be a loss globally.” ™

Week 04 26•January•2023 www. NEWSBASE .com P13