Impact of debt on Zambian women in the informal sector

13 April, 2023

Lusaka, Zambia

By Dennis Nyati

Women of Lusaka trading in the informal sector have called on the government to address their plight as they have been negatively affected by the removal of subsidies on fuel which has resulted in the increment of many essential commodities. This has impacted their businesses because their customers no longer have the disposable income to buy their wares because of high food and fuel prices. Fuel prices are being revised and adjusted every month as a measure introduced by the government to reduce its high spending on fuel subsidies to help the country service critical sectors such as health and education.

According to the women trading in the streets and markets of Lusaka, the impact of Zambia’s external debt on their businesses is devastating. This was revealed when EqualHealth’s Cancel The Debt subgroup Zambia lead, Dennis Nyati conducted some interviews with a few women trading on the streets.

The history of Zambia’s debt dates way back to pre-independence right up to now post-independence. The principal legacy of British rule in Zambia was an economy geared overwhelmingly towards the export of copper with manufacturing and agriculture left underdeveloped. At independence Zambia inherited a debt of over 50 million Zambian kwacha from the colonial government. This is the debt Zambia has failed to settle for more than 5 decades now. Translated at today’s exchange rate, the debt is equivalent to USD 2,500,000.

The women narrated that way before the onset of covid 19, they had already started experiencing challenges in their businesses. Enelesi Zimba of Kalikiliki compound in Lusaka narrated that “she has been facing challenges trading in her business way back since 2019 when she noticed prices of commodities increasing and has now been worsened by the monthly adjustment in fuel prices which is always an upward adjustment,” she narrated.

Another woman, Marita Mazyopa of Kabanana in Lusaka said that “ life is unbearable, I can’t manage to buy and sell my products as I used to, the order prices have increased and in the process I have lost my capital. I can’t afford three decent meals for my children, I can’t send my children to school because despite the government having introduced free education, children can’t learn on an empty stomach.”

In the late 1990’s under the structural adjustment program imposed by the IMF, World Bank and the Zambian governments, the country had its debt canceled.

According to a statement given in parliament by Finance Minister, Situmbeko Musokotwane, "the stock of Central Government external debt (excluding publicly guaranteed debt) as at end December 2022 stood at USD13.96 billion, representing a 7.04 percent increase from USD13.04 billion as at end December 2021. The increase in External Debt stock can be attributed to continued disbursements on existing project loans, mostly from multilateral institutions and bilateral creditors to finance on-going priority projects. Publicly guaranteed debt was USD1.45 billion as at end December 2022, declining by 5.14 percent from USD 1.53 billion at end December 2021."

When the PF government took over the running of the country under late president Michael Chilufya Sata, the country borrowed for infrastructure development such as roads, clinics, schools etc. They borrowed from public and private lenders such as the Euro Bond, Black Rock, and the Chinese. This is the situation that has led us to where we are today with the country being the first country to default on its loan payments to its lenders before at the onset of covid 19. The country was already in debt distress before Covid 19 was declared a pandemic.

The women have further called on the Government to expedite their discussions on debt with their lenders so that the country can return to normalcy where trading or doing business is not as burdensome as it is now.