Zambia will spend 75 times Scottish aid financing on debt repayments

Zambia will spend 75 times Scottish aid financing on debt repayments

Date: 17 September 2021
Campaigns: Aid

Zambia will spend 75 times Scottish aid financing on debt repayments.

Global Justice Now and Jubilee Scotland protest outside Edinburgh banks.

Zambia’s debt payments to private banks will render Scotland’s aid funding to the country “virtually insignificant”, campaigners warn, as they prepare to protest outside debt-holding banks in Edinburgh.

As one of the Scottish government’s four international development partner countries, Zambia has received £10 million from Scotland between 2017 and 2021 for projects helping healthcare, education and small-scale farming.

But Zambia’s annual debt repayments will total £1.34 billion this year, with £756 million going to private creditors, including banks in Scotland. The repayments to private banks alone amounts to more than 75 times the total aid funding Zambia receives from the Scottish government.

Zambia’s next interest instalment, totalling $20 million [£14.6million], is due on Monday. The sum could pay to vaccinate 14% of Zambia’s adult population. Currently, less than 2% of the country’s population is vaccinated.

The “eye-watering” sums illustrate the urgency of addressing global south debt and why campaigners want the Scottish government to pressure banks in Scotland to cancel Zambia’s crippling debt.

Global Justice Now last night projected “Cancel the Debt” onto BlackRock’s Edinburgh office, ahead of protests outside UBS, Aberdeen Standard Investments, and HSBC on Friday (17 September).

Protestors from Global Justice Now and Jubilee Scotland will bring a giant debt repayment cheque to the creditors’ offices, as well as a syringe comparing the proportion of Zambia’s funds being used to service debts to the cost of Covid-19 vaccinations in the country. Protestors will also hand in letters to the banks with their demands.

Banks often pile “crippling interest” on low-income countries’ debts, Global Justice Now says, “locking them in a never-ending cycle of payments”, which is harming Zambia’s ability to battle Covid-19 and respond to the climate crisis.

In March, David Malpass, President of the World Bank, called for G20 countries to do “much more” to force banks under their jurisdiction to participate in debt relief.

Liz Murray, head of Scottish campaigns at Global Justice Now, said:

“Scotland should be proud of its partnership with Zambia. £10 million should make a significant contribution to building the country’s economy. But the sum is dwarfed by Zambia’s huge payments to private creditors – including banks based here in Scotland – servicing a grossly inflated national debt.

“Big banks often pile crippling interest on low-income countries’ debts, locking them in a never-ending cycle of payments that prevent investment in crucial infrastructure, education, and health services – and they haven’t let up during the pandemic.

“The Scottish public rightly want to stand with Zambia. But our aid funding is virtually insignificant compared to the eye-watering sums demanded by banks right here in Scotland. ”

Line Kikkenborg Christensen, campaign director of Jubilee Scotland, said:

“The World Bank has been clear that the G20 countries must do much more to force the banks under their jurisdiction to participate in debt relief. The Scottish government may not have the legislative power to force debt relief, but they can send banks a clear message.”

“We cannot let banks in Scotland profit from Zambia’s debt crisis. Scotland must demand debt justice.”

Ends

Notes for editors

  1. Pictures of projections, attributable to Jacob Murray, available here: https://bit.ly/3ChcYzR
  2. The protest will begin at 10.15am on Friday 17 September outside the UBS offices, just off St. Andrews Square (UBS Wealth Management, 1 St. Andrews Square, EH2 2BD). It will then move to the offices of Aberdeen Standard Investments on St. Andrews Square (6 St. Andrews Square, EH2 2BD)  and then to HSBC on  Hanover Street.
  3. Zambia is due to pay $20.16 million [£14.57 million] to service its Eurobond debt on Monday: https://markets.businessinsider.com/bonds/sambia-_republikdl-bonds_201222_regs-bond-2022-xs0828779594
  4. This could pay for vaccines for 13.9% of those in Zambia requiring vaccination

18.95 million (total population of Zambia) – 44% (children aged 0-14) – 324,800 (people expected to be vaccinated through COVAX and other donations) = 10,283,410 (total people requiring vaccines)

According to the World Bank website, the cost per capita to vaccinate Zambian citizens is $14.32.https://blogs.worldbank.org/health/calculating-sub-saharan-africas-covid-vaccination-financing-gap

Total cost of vaccinating these people = $14.32 x 10,283,410 =  $147,258,431.20 or $147.26 million.

The Zambia government is due to pay $20.16 million servicing their debts on 20 September. This is 13.69% of $147.26 million.

  1. For more information on Zambia, debt and Scotland see:

https://www.globaljustice.org.uk/wp-content/uploads/2021/07/Scottish-debt-briefing.pdf   https://www.globaljustice.org.uk/blog/2021/08/scotlands-banks-must-cancel-zambias-debt/

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