Zambia's Struggle to Free Itself from Loans
Zambia's Struggle to Free Itself from Loans

Many Zambians are concerned about the level of foreign loans in the country and worry that when these loans are due, the country will not be able to afford them without negative consequences. This concern began in 2016 when Zambia was forced to issue Eurobonds to help finance its budget deficit, which was 12% at the time, according to ABC News. The country agreed to pay back $250 million within three years, but many Zambians worried that this money would be hard to repay without hurting the economy.

What you need to know about loans
Anyone who applies for a loan is required to sign a contract. This includes credit card companies, mortgage lenders, and other financial institutions that provide lending services. If you fail to repay your loan as required in your contract, then you have violated an agreement with your lender. If you cannot repay on time or find yourself unable to make payments, then it’s important that you contact your lender as soon as possible.

How Debt Slave Agreements Work
When borrowing money, make sure you read all of your credit agreement, including cancellation policies and rights. Don’t sign anything you don’t understand. Make sure it is clear whether or not you have paid off a loan before taking out another one. Keep track of your payments so that, if there are ever any errors on your credit report, you can demonstrate that you have indeed paid what is required and have done everything asked of you in good faith.

What Is a Debt Slave Agreement?
A debt slave agreement is when a country borrows money and agrees to pay it back at an interest rate that is too high. These agreements are often made between poor countries and rich countries. Zambia has been struggling with its loan payments for many years now. While these loans can be beneficial to certain countries, they can also bring devastating effects. Many factors must be considered before borrowing money or signing a debt slave agreement.

Does Zambia Really Need Loan-Free Status?
Although Zambia enjoys a very healthy economy and has improved its loan status, it still relies on loans for foreign aid. While some might consider foreign aid and loans to be similar, there are many fundamental differences between these two terms. One of these differences is that most loans come with much more stringent requirements in comparison to foreign aid. In Zambia’s case, it is important for them to free themselves of as many loans as possible.

Has Anything Changed in the Past 10 Years?
Zambia’s national debt was 40 percent of GDP in 2005 and has since climbed. The International Monetary Fund (IMF) approved a three-year Extended Credit Facility loan of $300 million to Zambia in 2014 that will reduce debt repayments while it works with investors to improve Zambia’s infrastructure and economy. This will allow Zambians access to clean water, improved roads, better electricity generation and more efficient oil and gas transportation systems.

The Good in Taking Loans Out
Zambians are often left with a bad taste in their mouth when thinking about loans. But it’s important to recognize that sometimes taking out a loan can be helpful—as long as you’re aware of and prepared for all of your options. For example, taking out an affordable loan might give you some financial wiggle room, allowing you to take on projects that would otherwise be cost-prohibitive.

What is Hope Loan-Free Movement (HLFM)?
Loan-Free Movement (HLFM) is a Christian non-profit organization based in Lusaka, Zambia. Hope Loan-Free Movement (HLFM) has been set up for one purpose and one purpose only: to help Zambians enjoy lives of freedom without having any debt, large or small. HLMF was established because we are confident that there is hope – even if you are burdened with loans, God can set you free!

Can Zambians Get Rid of Their Current Debts?
Yes and no. Generally, Zambians cannot get rid of their current debts, which will follow them for a very long time. In 2013, there were 9.7 million debtors in Zambia that owed $638 million.

Alternative Solutions that Encourage Debt Repayment Without Them Feeling Forced To Do So
Some economists, however, argue that it is a good thing for Zambians (and others) not be paid back their loans. These economists believe that it’s more valuable for people in less-developed countries to develop a relationship with local businesses. Rather than giving them cash, which many times goes directly into their bank accounts, these individuals should encourage borrowers to purchase local goods and services. This approach would benefit communities by helping them become self-sufficient and fostering a strong economy through an interdependent community.

A Stronger Economy Starts With Debt-Free Citizens
Zambia, Africa’s second-largest copper producer, has struggled in recent years to escape economic and political turmoil. However, despite borrowing nearly $10 billion since 2001, Zambians are still plagued by poverty—an unsustainable situation made worse by foreign debt. The country’s inability to free itself from loans—combined with inadequate policy-making and severe corruption—has been one of its biggest hindrances.

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