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Zambia signs for fresh loans from China

Time Posted: December 31, 2013 12:22 pm
Finance Minister Alexander Chikwanda

Finance Minister Alexander ChikwandaFinance Minister Alexander Chikwanda

The Zambian and Chinese Governments have today signed two multi -million dollar bilateral agreements to accelerate development in different sectors of the economy.

The grants are worth 183 million kwacha and an interest free loan of another 183 million kwacha which is to be repaid over a period of 20 years.

Speaking at the signing ceremony, Finance Minister Alexander Chikwanda said the signed agreements will help government accelerate the development agenda.

Mr. Chikwanda has expressed gratitude to the support China has rendered to Zambia’s development agenda since 1964.

“The agreements we have signed today have their origins in the desires of the two countries to attain meaningful development,” Mr Chikwanda said.

He added, “Under the PF watch with President Sata in power, we have to eradicate poverty in the shortest time possible and this will only be made possible with external support. May the relations between the two countries continue to flourish.”

Meanwhile,Chinese Ambassador to Zambia Zhou Yunxiao said 64 million US Dollars of the total amount will be used to implement projects to be decided by the two governments.

Ambassador Yunxiao said the provision of the two funds demonstrate how fully committed his government is to support Zambia in its social and economic development.

And the Chinese envoy also disclosed that Zambia will significantly benefit from the 10 trillion US dollars of exports to China from Africa in the next five years as well as the 500 billion US dollars that country will invest in the same period.

“The agreements are to provide two grants by the Chinse government to the Zambian government and these are to be utilised by projects to be discussed by the two governments, mostly likely on infrastructure development,” the envoy said.

“This is a new year present for Zambia from China,” he said.

67 Comments

  1. +26
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    flag ex-moma says: ex-moma
    December 31, 2013 at 12:26 pm |

    New years gift to the Zambian Youth from the PF government -MORE DEBT…..If you never lived in Zambia under Kaunda don’t worry PF has guaranteed you shall experience the 1980′s all over again! This time you will have to pay the debt, your future is being sold as you enjoy yourselves at Arcades!

    Reply
    1. +10
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      flag ndobo says: ndobo
      December 31, 2013 at 12:37 pm |

      Sata is just destructive by nature,,, good advisors are Sata`s worst name!!!

    2. +5
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      flag Truth Hates says: Truth Hates
      December 31, 2013 at 12:49 pm |

      Naimwe this debt is free of interest……GRZ will pay back the same amount in 20 years. Even me if I have a good plan for free interest money I can borrow.

    3. +15
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      flag ex-moma says: ex-moma
      December 31, 2013 at 12:54 pm |

      @Truth hates – it must be people like you running the government today.Have you ever heard of inflation? I guess not. Case closed.

    4. +12
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      flag blabla says: blabla
      December 31, 2013 at 1:35 pm |

      @Truth hates debt used for a constructive purpose is welcome. The worrying part in this case is that the projects to be financed have not even be decided upon yet! Does that make sense? How do you borrow first then decide afterwards what the money will be used for? How do you know if you are borrowing too much or too little in the absence of an investment plan? Worse still in the case the Chinese are going to have a say in how the funds will be utilized so there is no saying whether the the use will be indeed to the benefit of Zambia or will be serving Chinese interests at our expense

    5. +8
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      flag abeenaaa! says: abeenaaa!
      December 31, 2013 at 2:10 pm |

      Debt Trap which we the youth will have to sort out when our time to govern comes, when all these old pigs are gone. o my, its frightening when u think of the rate at which they r borrowing.

    6. +7
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      flag God take Sata away! says: God take Sata away!
      December 31, 2013 at 2:33 pm |

      “Chinese are far more intelligent than you are. So be careful, Sata tells new appointee”

      only a ****, knows what he is doing is wrong and does it anyway- Sata you know these Chinese are smarter than you and they are up to no good with these loans, but you are still signgig s.tupid i.diot.

    7. +4
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      flag GBM says: GBM
      December 31, 2013 at 2:35 pm |

      “Chinese are far more intelligent than you are. So be careful, Sata tells new appointee”

      only a f.ool, knows what he is doing is wrong and does it anyway- Sata you know these Chinese are smarter than you and they are up to no good with these loans, but you are still signgig s.tupid i.diot.

    8. +6
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      flag TheEngineer(Australia) says: TheEngineer(Australia)
      December 31, 2013 at 2:38 pm |

      Did we not tell you that you were putting F.OOLS in government….?

      While the world economy will be recovering you will be busy paying debts

      We will be watching you while enjoying a cold victoria bitter

    9. +4
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      flag Spook says: Spook
      December 31, 2013 at 2:44 pm |

      @Ex-Moma. You are very right. These chaps are mortgaging the future of our grand children. In the meantime, they are busy looting to secure the future of their illegitimate children’s grand children.

    10. +1
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      flag papa says: papa
      January 1, 2014 at 12:06 pm |

      @ Ex-moma, I couldn’t agree with you more. Alexander Chikwanda has not learnt anything from his first tenure as Finance Minister under Kaunda. The proverb “You can’t teach an old dog new tricks” is so accurate when applied to Chikwanda. This guy is busy raping mother Zambia and no one is restraining him. Can someone please stop this financial rapist.

    11. vote
      flag Wanu Ngwee says: Wanu Ngwee
      January 2, 2014 at 12:19 am |

      @BLABLA, don’t you PF’s investment plan? It’s MOREVMONEY IN PF POCKETS!!!

    12. +1
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      flag Wanu Ngwee says: Wanu Ngwee
      January 2, 2014 at 12:22 am |

      Now tell me; what do you pay back with when your total debt exceeds the asset value of your country?

    13. vote
      flag Wanu Ngwee says: Wanu Ngwee
      January 2, 2014 at 12:33 am |

      Why accept a new year present whose monthly repayment rate ( in addition to many other debts) will equal or surpass your monthly salary? Doesn’t such a present give you a YEAR OF HUNGER?

  2. +3
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    flag /61/1 says: /61/1
    December 31, 2013 at 12:27 pm |

    Rubbish

    Reply
  3. +9
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    flag The Chosen One says: The Chosen One
    December 31, 2013 at 12:30 pm |

    The next government will have problems repaying these loans. These guys signing the loans know that they will be long gone (dead) by 2033, so the future generation will have to bear the repayment burden. Expect higher taxes for the next 20 years.

    Reply
    1. +9
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      flag ndobo says: ndobo
      December 31, 2013 at 12:33 pm |

      not only the next government … but all Zambians will have problems for a long time!!

  4. +14
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    flag Boondocks says: Boondocks
    December 31, 2013 at 12:33 pm |

    This is the same man that took us into serious debt in the UNIP era. He doesn’t see anything wrong because that’s his thinking stretch. The fact that we keep on bringing back the same useless and spent forces back shows how stu.pid we are as a nation. This is a bunch of leaders who do not understand the socioeconomic challenges of this century. Collectively, Zambians are failures, irresponsible for our destiny as a nation and plainly stu.pid. We need a complete overhaul and regenerated leadership if we are to move forward. Right now, we are a country of collective failures.

    Reply
  5. +3
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    flag Wren says: Wren
    December 31, 2013 at 12:37 pm |

    Pathetic failures (PF) have doctorates in borrowing. Honestly these mangwams are selling us even our children and our children’s great grade children.

    Reply
    1. +2
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      flag Peter says: Peter
      December 31, 2013 at 1:37 pm |

      Well said buddy. These buggars are a stinking bunch of retards

  6. +5
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    flag chills says: chills
    December 31, 2013 at 12:37 pm |

    This old ugly beast is endangering the future of our children.Why is the country so stupidly quiet and let him go on like this

    Reply
    1. +1
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      flag Chindakwanda-Galileo Galilei says: Chindakwanda-Galileo Galilei
      December 31, 2013 at 6:44 pm |

      Ukuteka ichalo kwalishupa bakaamba. Don’t insult, just put up your argument in a civilised manner.

  7. +2
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    flag Chindakwanda-Galileo Galilei says: Chindakwanda-Galileo Galilei
    December 31, 2013 at 12:45 pm |

    Debts and debts, yes debts, even America has them. We think that it will be easy to repay these debts when we take our economic activity to a higher level through improved infrastructure and investment.

    Well, this is government business, what about you guys at your personal level? You have loans from B Blue, Capital solutions, Izwe, Bayport, Microfin, ZANACO, Cavmont, Barclays, etc etc, Those houses and cars you are driving were bought on borrowed money!!!! The question is, have those loans helped you? If yes, then the government is helped by these loans from China and elsewhere. Just check your capacity!

    Reply
    1. +4
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      flag blabla says: blabla
      December 31, 2013 at 1:39 pm |

      @7Chikwanda ..debt in itself is not a problem so long it is used for constructive purpose such as acquisition of assets and investment. As you rightly said one has to check the capacity to repay when you borrow. But in this case these guys are not even able to say what the funds will be used for? Can we be certain that the funds will be put to good use and not just to finance expenses? At face value it looks like reckless borrowing.

    2. +1
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      flag Chindakwanda-Galileo Galilei says: Chindakwanda-Galileo Galilei
      December 31, 2013 at 2:34 pm |

      Blabla, there is an indication that the money will most likely go to infrastructure development. Unless you think our infrastructure is OK. It may be power stations, roads, hospitals, universities etc. Don’t you need these? What is required is to determine which ones will help us achieve a higher level of economic performance, such that we shall even repay the loan easily. That must be our headache. Otherwise, we are not generating enough revenue for us to do a million and one things that we must do. If it is possible to raise our own money, tell me how, and everybody must agree with you. Not when a revocation on NGO import exempt you start crying! In the meantime you want more money to be paid to you…

      Happy 2014 my friend!

    3. +1
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      flag Nine Chale says: Nine Chale
      December 31, 2013 at 3:36 pm |

      @Chikwanda-Galileo, You hit the point! Those are my thoughts too. I’m not seeing any other way for us to boost our economy at the momment apart from an expansive monetary policy (increase in our money supply). We do not need to worry about repayment as long as we strictly stick to our implementation plan and meet the targets of our development agenda.

      Actually, I think we are even better off borrowing from China than the IMF, World Bank or the ECB. I can cautiously predict from past experience that China is more likely to give us an outght write-off of our debts as compared to the other institutions which are reknown for the economic sabotage they have done to African countries.

    4. 0
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      flag Chindakwanda-Galileo Galilei says: Chindakwanda-Galileo Galilei
      December 31, 2013 at 6:35 pm |

      @Nine Chale, TAHNK YOU! You do understand our predicament.

  8. vote
    flag Yambayamba says: Yambayamba
    December 31, 2013 at 12:49 pm |

    Grants are ok, but we have to be careful with loans!

    Lest we forgot so easily, for our next debt forgiveness Bono (love U2 music by the way) may not be around to intercede on our behalf. Be careful of the DEBT TRAP, this time from the EAST!!!

    Reply
  9. +1
    0
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    flag Warthog Ngulube says: Warthog Ngulube
    December 31, 2013 at 12:50 pm |

    In the words of Zambian Watchdog, “kufigeta getafye ba kalamba.”

    Reply
  10. vote
    flag Twende says: Twende
    December 31, 2013 at 12:52 pm |

    When people advise you that things change with time u don’t listen. how do u appoint a 1970 chakuti accountant to be Minister of finance. those days it was normal to borrow without considering other options like the windfall tax he has at his disposal.

    Reply
  11. vote
    flag Namona says: Namona
    December 31, 2013 at 12:52 pm |

    And you call it “new year’s present”. Just how do some people manage to this like this? Since when was a loan a present?

    Reply
    1. vote
      flag Namona says: Namona
      December 31, 2013 at 12:56 pm |

      Present??? Just How possible is it to think like this?

  12. +3
    0
    vote
    flag The Man says: The Man
    December 31, 2013 at 12:59 pm |

    Quote from above “Meanwhile,Chinese Ambassador to Zambia Zhou Yunxiao said 64 million US Dollars of the total amount will be used to implement projects to be decided by the two governments.”

    I hope the ambassador was misquoted. There is a golden rule when it comes to borrowing; never borrow if you have not carried out an exhaustive expenditure plan. The impression being given is that we can borrow because the money is there to be borrowed. We shall be the losers because I am sure the lender has already worked out why they are ‘lending’. And I hope someone has worked out where the maintenance funds will come from for all these capital projects. Remember the potholes and dilpidated buildings- those old enough.

    Reply
  13. vote
    flag Namona says: Namona
    December 31, 2013 at 12:59 pm |

    Borrowing till the last minute of the year!! We will die borrowing!!

    Reply
  14. +5
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    flag Mfumu says: Mfumu
    December 31, 2013 at 1:19 pm |

    The rate at which we are accuring debt is alarming. Hardly a week goes without signing a new loan. If these loans were to finance revenue creating projects then one would have some assurance that in time the loans will be paid back. Unfortunately, this is not the case. On paper, the loans are meant for something but used to fund consumables and perishables such as salaries etc. This is very short term and leading us back to a debt trap. To assume that revenues from the copper mines, which apparently have tax breaks, will pay off the debt is myopic. If these loans were being pumped into reviving and investing in manufacturing and industries that adds value to our raw products, then perhaps in future such investment would yield dividends.

    Reply
    1. +1
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      flag Jay Jay says: Jay Jay
      December 31, 2013 at 3:00 pm |

      Spot on!!

  15. +1
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    flag Jay Jay says: Jay Jay
    December 31, 2013 at 1:31 pm |

    Interest free or not what is important is what you are spending the loan on and how you spend it. Which projects is this old man talking about? We all know a chuck of this money will corruptly end up in these crooks’ pockets via their companies.
    Fossil Chikwanda and Sata won’t be around in 20years hence the reckless borrowing. ..are you telling us we cannot raise $60 million from other sources?
    These selfish people are only interested about the next election and they don’t have vision for us and our children. Fossil Chikwanda is obsolete so are his ideas….we are not going anywhere with these people.

    Reply
  16. vote
    flag Fititi says: Fititi
    December 31, 2013 at 1:39 pm |

    Blessed is the hand that giveth, than the one that getteth! To those who think they gave little and need more, even the little will be taken away. Inkongole mwe Bantu!

    Reply
  17. vote
    flag Cindy says: Cindy
    December 31, 2013 at 1:52 pm |

    Nothing is for free! No matter how sugar coated it appear, there is a price tag of interest to it! People open your eyes of your minds this is not the dark ages! One day there will be a scramble for Zambia, only this time in the form of Auctioning!

    Reply
    1. +2
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      flag Enka says: Enka
      December 31, 2013 at 3:27 pm |

      We’ll auction off the antique livin at state hse

  18. +2
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    flag Mr. Facts says: Mr. Facts
    December 31, 2013 at 2:17 pm |

    Mr chikwanda will go down in history as the man that finished pen ink signing loans.

    Reply
  19. +2
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    flag Fr33dom says: Fr33dom
    December 31, 2013 at 2:25 pm |

    What we are seeing is looting at the expense of our nation. To understand what this government is doing, look at the tender procedures and the recent events with GBM. The government borrows money on the pretence it’s for developmental projects which is ok however, if you analyse the cycle of events which follow when it comes to allocating the money, it’s clear that the chief allocator “Sata” decides where this money should go. If hypothetically speaking the borrowing was to improve logistic in FRA, we now know that this money would go straight to GBM. Now multiply this by the bogus projects that this government has introduced? This is not only immoral but who ever forms the next government is guaranteed to spend the first year investigating and prosecuting while the country suffer.

    Reply
    1. +1
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      flag Jay Jay says: Jay Jay
      December 31, 2013 at 2:49 pm |

      What’s more laughable is the fact that these gullible people are now calling GBM principled….oh my god where were those selfsame principles when he was getting those GRZ contracts at inflated prices and eliminating genuine hardworking Zambian entrepreneurs from the tender process.
      Its just disgusting!!

  20. +3
    0
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    flag Mwaba-Jr says: Mwaba-Jr
    December 31, 2013 at 2:44 pm |

    20 years from now, it will be us the younger generation answering to the Chinese when they come asking for their money… Sata and Chikwanda will be long gone. It is sad that we can’t get money from our mines…. instead we are borrowing

    Reply
    1. +2
      0
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      flag Jay Jay says: Jay Jay
      December 31, 2013 at 2:58 pm |

      Spot on. ..they know they won’t be there….these people have an average age of 68. There is no prudence its just utter recklessness and you don’t have to be an economist to see where this bus is heading to.

  21. vote
    flag ubec deuka says: ubec deuka
    December 31, 2013 at 2:57 pm |

    Grant or Loan? Please enlighten me.

    Reply
    1. vote
      flag Jay Jay says: Jay Jay
      December 31, 2013 at 5:04 pm |

      Read whole article not LT’s misleading headlines! !

  22. vote
    flag [email protected] says: maikalange@zambia.co.zm
    December 31, 2013 at 3:16 pm |

    Another loan — can someone tell me what has been done so far with all the other loans we have acquired in the last three years? What money-making project have we undertaken to make sure we CAN pay back these loans? Are we building factories? Are we investing in agriculture, industries, manufacturing?

    Probably not! We are most likely using it to for salaries and other expenses.

    Zambia will pay dearly for the few years PF will be in power.

    Brace for tougher times.

    #OneZambia

    Reply
  23. vote
    flag kabamba Kalende says: kabamba Kalende
    December 31, 2013 at 3:25 pm |

    Don’t you it’s time we as Zambians demonstrate against government’s reckless borrowing. Organize a protest or something. Black Friday.

    Reply
  24. vote
    flag Maura says: Maura
    December 31, 2013 at 3:35 pm |

    Owe no man nothing but love! Inkongole busha .

    Reply
  25. 0
    -1
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    flag Bosses says: Bosses
    December 31, 2013 at 3:47 pm |

    Debt is the new money, it depends which side of the table you are sitting at.
    USA, UK, EU, Japan are flourishing on debt. China at the moment has a local debt problem of US$3trillion. Ralph Emerson once said, a man in debt is so far a slave. And Nelson Mandela equally said money won’t make success, the freedom to make it will.

    Reply
  26. vote
    flag Cindy says: Cindy
    December 31, 2013 at 4:05 pm |

    Mr. Chikwanda, do you honestly believe the words you are uttering?

    kwena na bu sebana.

    Reply
  27. +1
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    flag chikwandacindy says: chikwandacindy
    December 31, 2013 at 4:51 pm |

    PF is a party of Plunderers Forever.
    They plundered under Kaunda, chiluba, mwanawasa, rupiah and now plundering direct under Plunderer Forever Party.
    China is going to make 100% profit through projects that will be given back to its citizens. 20% is taken by Sata and his minions. Only 20% of the loan/grant goes to the project. Who is the beneficiary of such cheap money (if there is anything like Cheap)?

    Reply
  28. vote
    flag mumbwe says: mumbwe
    December 31, 2013 at 4:54 pm |

    Ba Fikala ba PF, who are you fooling, that money is going into your pockets 30% and to by elections 60% and intended purpose 10%. Dont just think of yourselves, think about the future of the country. We want our country to be as developed as western world countries.

    Reply
  29. +1
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    flag Perpetual Beggar says: Perpetual Beggar
    December 31, 2013 at 4:56 pm |

    Under PF, Zambia has become a perpetual beggar.

    Reply
  30. +1
    0
    vote
    flag . says: .
    December 31, 2013 at 5:00 pm |

    @19.1 Jay Jay, so true. We are gullible. Anybody and everybody comes, pulls wool before our eyes and we dance with blinds in front of our eyes.

    PF is the worst thing that can happen to any country.

    Reply
  31. vote
    flag zambianyouth says: zambianyouth
    December 31, 2013 at 6:07 pm |

    @ the loan will be used on projects which will be decided by the two countries: now my question is why get a loan and then you start to looking for projects;this does not sound like good planning its like now we are just borrowing for the sake of borrowing…borrowing should be done coz of identified areas which need serious attention not after getting the money you start looking for projects

    Reply
  32. +2
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    vote
    flag concerned says: concerned
    December 31, 2013 at 6:18 pm |

    Sellout of Zambia continues,very well done,your children and following generations will have to suffer,isnt it sad????????

    Reply
    1. vote
      flag Jay Jay says: Jay Jay
      December 31, 2013 at 7:05 pm |

      Add the $750m Eurobond to that…which is unaccounted for so far just disappeared in a black hole. Suddenly $120m which was sent to ZRL is enough meaning that there is nothing they are doing there just using the money to pay themselves hence the reason they are quiet.
      Zambians need to WAKE UP from their docility!!

  33. vote
    flag dudelove says: dudelove
    December 31, 2013 at 7:32 pm |

    I hear Chikwanda orgasms when he signs a loan agreement so thats why he does it so much.

    Reply
  34. vote
    flag Mr.Tembo says: Mr.Tembo
    December 31, 2013 at 8:00 pm |

    Are they LOANS OR GRANTS ba Lusatimes??? Please lead us into the new with classic journalism and not chair-nalism, PLEASE!!

    Reply
    1. vote
      flag Jay Jay says: Jay Jay
      January 1, 2014 at 12:03 am |

      Spot on! !

  35. vote
    flag Jonathanmhango Financial Analyst says: Jonathanmhango Financial Analyst
    January 1, 2014 at 3:59 am |

    Atleast I have come to learn that no borrowed money is interest free.Its about the pricing of the loan Its like a discounted or a present value scenario One needs to look at the term structure and asses the other risks such as currency interest risk duration term including the discretion of Gov. to sorely pick projects without being pointed to by the financial because in it there could be a premium for the interest cost.Then the simple time value of money USD in relation to the kwacha also has an implicit cost especially the currency of borrowing to the kwacha.I simply allow my placed money to gain value by the rate in it my rate is recouped.

    “Plain…

    Reply
  36. vote
    flag Chidumbo says: Chidumbo
    January 1, 2014 at 7:25 am |

    Another loan this time from India to be signed in March 2014 valued at USD 447 million

    Reply
  37. vote
    flag kuta says: kuta
    January 1, 2014 at 10:13 am |

    this is an interest free loan. this.is.fine, its like someone.giving you money in advance which you need.

    Reply
  38. vote
    flag Jonathanmhango Financial Analyst says: Jonathanmhango Financial Analyst
    January 1, 2014 at 3:14 pm |

    Its not free money if the opportunity cost outweighs the borrowing Having discretion gives you leverage to invest wisely

    Again you borrow USD and need to raise kwacha to cover repayment.In it and in this lies the implicitly cost of funds borrowed but again the dictation to invest proceeds.

    The lesson is to analyze all borrowing on cost and benefit and settling for the most viable and cost effective option though bilateral better than commercial pure but its always a practice to look closely and carefully.

    Learning to understand the risk premiums that goes in the interest rate will make the understanding to see that its not free money and therefore prudence in utilizing it

    Reply
  39. vote
    flag Zambiana says: Zambiana
    January 1, 2014 at 5:19 pm |

    Do we really need to be borrowing? Don’t we learn a lesson ? Wasn’t it just a few years when we came out of the “Debt Trap”. Can’t we make do with what we have? Why do we always “deliberately” fall into traps?

    Reply

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