Finance Minister Alexander Chikwanda says the recently oversubscribed bond is proof that international investors have confidence in the Zambian economy.
Mr. Chikwanda has also observed that the oversubscribed bond is an indication that government is on the right track and has the confidence of key stakeholders.
The Minister was speaking in Washington DC when he and his Local Government and Housing counterpart Emmanuel Chenda has called on Zambia’s Ambassador to the US, Palan Mulonda.
And Mr Chenda says his mission to the high level meeting on water and sanitation in Washington DC was to share and learn from the best practices especially those on the African continent.
This is according to a statement issued by First Secretary for Press and Public Relations at the Zambian embassy in Washington DC, Patricia Littiya.
Meanwhile, the Economic Association of Zambia -EAZ- has welcomed Zambia’s successful issuance of a 1-Billion US dollars second sovereign bond on the international capital market.
EAZ president Isaac Ngoma however says though the country needs the money, the bond has come at a higher cost compared to the 7-hundred and 50 million US dollar bond which the government successfully issued in 2012.
Mr. Ngoma notes that there is need therefore to sustain the repayment of the bond on time and that government must state exactly how the money will be used.
The EAZ president was speaking on Kwacha Good Morning Zambia programme on ZNBC television on Saturday.
Acting Finance Minister, Edgar Lungu on Tuesday said like the first sovereign bond of September 2012, the second bond has been a resounding success and was oversubscribed.
In a statement to ZNBC, Mr. Lungu said the move is an expression and affirmation of the confidence the international investor community has in Zambia.
Mr Lungu says the bond proceeds will be injected into growth-prompting projects in various critical sectors of the economy, such as the transport and energy sectors.
A sovereign bond is a debt or loan issued by a country.
Ba Chikwanda..hahahahahahah! you think a moneyleader giving more and more kaloba is having confidence in you? on the contrary,,, they are giving you enough rope to hang yourself,,,,, and when they start pulling that rope, you will pay thru every part of your body
clearly Ba ndobo mulibe business acumen. Unlike kaloba yakunyumba the bond market researches on who it lends it’s money to. They never lend to those unlikely to repay. by over subscribing it means the market has great confidence Zambia will make the money to repay. what makes it have the confidence? well that’s another lesson involving credit ratings Africa s emerging market offer etc. So Chikwanda is quite right to make his conclusions above
Chikwanda will be dead by the time this kaloba needs to be repaid. It will be your children that suffer poverty to pay these moneylenders!
@Made a Gas Car, you’re certainly very dumb. Been credit rated is not a passport to go on a borrowing binge . Creditors are more than willing to lend to countries because short of defaulting a country can never disappear. Generations upon generations will have to pay back the money Chikwanda is borrowing to look after his PF people and relatives. Countries that are far richer than Zambia found themselves in trouble when they borrowed irresponsibly. Think Portugal, Ireland, Greece and Ireland. Your PF relatives are borrowing to eat because 53 % of the expenditure is recurrent. This is irresponsible.
When the world economy collapsed in 2008, it was because banks where giving loans to people with bad credit – called sub-prime loans(catch phrase -bad credit- can still get loan).
When the Zambian economy was doing well some two years ago, we got the first bond at 4% interest, the one ba Chikwanda is singing about is at 8.5% . In western world if they creditors have confidence in you the interest rate goes down not up.
The first Bond we are paying US$43 million per year, this one will most likely call for some US$100 million payment per year. How many hospitals and schools can we build with that kind of money.
Chikwanda has definitely a different way of understanding economics. Borrowing at the scale PF is borrowing is never a sign of a sound economy. This is the difficult PF and its supporters have, they just do not understand economics and how to apply it in order to create wealth. What you are doing is auctioning the future generation for free. You cannot be borrowing such money when you have not create a proper environment for your own entrepreneurs to absorb or gain meaningfully from such undertaking. In other words you are borrowing for the Chinese firms. What will be left in country is debt and debt only for the future to strangle with. For sure Chikwanda you know your clock does not have more than 30 years, hence this trouble you are leaving is not for you sort out.
Dont screw Zambia its you who is dumb. If Zimbabwe, Somalia even Malawi were to go for the bond market noone would subscribe. Ask yourself why. A country can fail to pay and you will be saddled with a coupon that noone pays until you die. As for countries not dying go get back your debt from Somalia if you lent them money in the 70s and 80s when they had a government. Like in any situation the PF need only to watch where they spend the borrowed money. It should not be to pay salaries. Do what Nigeria did. invest it in energy, transport and communication.The investor wants to find these before bringing his money
Mr Chikwanda, first give us a breakdown of what you did with the first $750m. Zambians we’re too laid back, this guy thinks Finance Ministry is only about looking for ways to source Kaloba and we let him get away with it. Investors confidence may well be partly due to the current manageable debt stock which is fast spiralling out of control and will soon be unserviceable. Chikwanda’s recklessness with our purse confirms what we already know of This pack of PF semi literates -not a care in the world of what becomes of Zambia tomorrow provided their families are comfortable.He knows it will take a miracle to win the next presidential election, so time to steal is now.
While Angola is building infrastructure using the Countries own generated revenue, Zambia is busy borrowing. But again, wasn’t this the same Monkey that was Finance Minister when this Country got indebted up to $7billion.
What a pack of hyena’s, simply have no clue how to raise money using own means. 2016 Ni Zwaaaaaa
Zambians are too passive and docile. ..in Kenya they wouldn’t tolerate this mediocrity.
This old full! How can you say they have confidence in you when the cost of your borrowing has gone up from 5% interest on your first bond to over 8% interest on the recent one? And since when was getting a loan at high cost a thing to be proud of? You’re a very useless government. …thugs complete with a tribal militia!
Not just useless but a pck of Hyena’s whose forecast doesn’t go beyond today.
He would have borrowed at 12% and still said the damr thing as this fossil will not be around to pay back a single ngwee he merely wants his utterly useless govt of empty tins to buy its way through 2016 elections.
chikwanda hahahaha like ndobo , this man doesn’t know lending money is big business, that interest of $87 million per year is enough to excite everyone,that’s not investors’ confidence but greed,you not even investing that money but spending it, hope you keeping receipts we will need to know where all this money is going
To these empty tins infrastructure development projects is creating a national airline, paying civil servants wages and misappropriating funds through single sourced tenders to build roads.
You bloggers calling Chikwanda a fool you expect a finance minister to say this oversubscribed bond is a disaster for my government? We should not have got this money? Really? Yaba!
How can one brag about borrowing money at such a high interest rate? Is this Chikwanda normal? This happens when a country is being run by people who believe in weird values.
This money will just be stolen in fake government contracts. Look at what happened to the first Euro-Bond! Zambia is really in trouble!
yes they give you money coz they will get more when you pay back…simply put….just repeating history…these are our “intellectuals”
What confidence?
HH the opposition UNDP president escaped from the rooftop at Sun radio. How can the economy grow if the opposition in a democratic state, who have a mandate to grasp govt of any day checks and balances are not allowed to do so?
PF is a problem and can’t tell people the truth. I don’t see democracy apart from papers and mouth talks, its not practicable in Zambia anymore. The cadres have no jobs apart from violating human rights, promoting violence against the will of the people and you expect the “ka” Kwacha to pick up!
If there is violence in any place, know that the economy will be always doomed and the likes of Chikwanda with his fellow PF tribes clink are out weight losing, whilst living in dwellings of deceit, so is denial.
Pathetic PF.
Haha,the tiny zambian economy on a borrowing binge,while the huge $510b Nigerian economy is only indebted 11% of GDP.
Mulungu,help us.
Why did zambia fail to pay 5billion dollars and we had to ask for debt relief,we are now already up to the neck!
Few can understand this.
To the contrary, our economy is being sold piece by piece, and when the debts are called
just looking at the photos one can see that these two are F00z. To make it worse their leader looks even more F000liSz.Hence this irresponsible borrowing
What confidence is the Fossil Chikwanda talking about? They have oversubscribed because they are lending us the funds to us at favourable terms to themselves double the rates to the last issuance.
The sad thing about all this is that this bond will placed in the “national pot” and used to pay wages, fund wasteful projects at high cost so this govt can pay itself through 2016 presidential elections.
All you people making noise saying chikwanda will be dead and your children will be blah blah blah, are forgetting that the infrastructure being built will be used by your children just like we are enjoying using the little things KK built. As a hunter gatherers once your stomachs are full you sit back until you feel hungry again that’s when you start looking for wild fruits. That’s why we want to remain the same. We cant even build a sewer system.
Iwe, what infrastructure? This money is going into their pockets to take care of their children and girlfriends!
Well Destroyer it is up to us to ensure the money is used on progressive projects not stolen. we shouldn’t be crying about Chikwanda borrowing the money. He has so we should move on and monitor how the money is used not cry about spilt milk.
This chikwandalization of the economy will lead us to hell. When this fossil graduated as an economist, there was no strategic planning and I doubt whether he knows how to generate money to sustain ourselves. KK(kwacha killer) should remind him how they both run down the economy in the 70s and left all of us for dead.
The PF must be congratulated and given a pat on their back, for being the masters and experts they have become, at creating chaos and taking credit for it! Twenty-four months ago, Zambia was able to issue debt at 4%. Now, barely half way through their first term in office, PF can only issue debt at 8.5%, a cost increase to the issuer of more than 100%! How not so horrifying is that? Much worse, PF even have the audacity to take credit for it!
Further, assuming even at 4%, the first euro bond was also issued at a premium, since even then, the issuer had less than perfect credit rating; which sane bond investor would not have scrambled and scavenged on this loot of the century issued at 8.5%? As as shrewd as bond investors are, it is a no brainer that they are knowledgeable of the ongoing average bond market yield rate.
Under these circumstances, why must it not concern us that PF, with their hands akimbo, are able to look back at all this and say: “job well done!”?
Such concern should be a natural happenstance, in the mind of any well-meaning Zambian. The more skeptical Zambians are more likely to take their concern a step further, by questioning the very motive behind it. What’s up?
A well-known tenet of the bond market is that, the bond holder possess the primacy. What this means is that in case of adverse eventuality, bond holders take the top cream and leave the rest of the other investors scrambling for the watery and salty soup! A bond that yields 8.5% gives a bond holder the best of both worlds – in both good and bad times.
Even a novice would have jumped at this bond offer by the Zambian government. The “oversubscription” was therefore, not the result of the gods smiling on Zambia, per se. Should the Zambian government fail to generate adequate liquidity to service its ever escalating debt, it will not be the bond holders who will be scratching their heads; rather it will be the Zambian government to be skinned alive.
Aba bantu, their insatiable appetite to accumulate debt is incredible! At this rate we shall be caught in a “debt trap” in no time! They must look at cheaper ways of raising and securing funding than look for an easy way out with far reaching negative implications in the long term. Its economic ineptitude of the worst kind to be going for debt when other avenues should be investigated. TAX THE MINES ADEQUATELY!! Its this same finance minister who is on record to brand those pushing for windfall tax as “mad”, while he working on having the nation end up with a debt albatross around its neck. Its unpatriotic and treasonable to commit the country to debt this way.
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