The Other Hidden Debt - How power contract transparency can help prevent future debt risk
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Posted by Todd Moss and Rushaiya Ibrahim-Tanko[1]
Soon after the reformist businessman Hakainde Hichilema won Zambia's presidency in August 2021, he learned that his country’s finances were far worse than he feared. Though Zambia had once been highly indebted, it had received a fresh start from comprehensive debt relief in 2005. Now, sixteen years later, Hichilema discovered the treasury was “literally empty” and an urgent audit found a total of more than $16 billion in external debt, including billions in underreported obligations. Attention from both the media and Zambia’s creditors has largely focused on the more than $6 billion owed to Chinese lenders, about double the amount reported by the previous government. But there’s another source of concern beyond opaque loans or deceptive bookkeeping: undisclosed electricity contracts. Buried in the new accounting of Zambia’s debt is more than $1 billion in unpaid arrears owed to power companies.
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