Treasury Fredson Yamba (left) and Bank of Zambia Governor Michael
Gondwe (right) at a media breakfast at Taj-Pamodzi hotel in Lusaka
ZAMBIA’S economy is headed out of turbulence following the recent issuance of the US$1 billion Sovereign Bond, Secretary to the Treasury Fredson Yamba has said.
Mr Yamba said the international investor community has shown positive response to the issuance of the Bond.
“The economy is heading out of turbulence as attested by the positive response of the international investor community following the issuance of the US$1 billion Sovereign Bond. The ratings actions of International Rating Agencies, Standard & Poor’s and Fitch were also positive factors to consider,” he said.
Mr Yamba added that the country’s external debt obligations remained on course and that this was consistent with the need to maintain credit worthiness and safeguard macroeconomic stability through debt sustainability.
Mr Yamba said this in a statement issued in Lusaka yesterday by Ministry of Finance public relations officer Chileshe Kandeta.
He said as at end of March, 2014, external debt stood at US $3.16 billion or 15.72 per cent of Gross Domestic Product (GDP) while domestic debt stood at K20.2 billion or approximately 16.57 per cent of the GDP.
For the period under review, total external debt service including principal and interest payments, stood at USD48.8 Million of which USD 8.9 Million was a payment made in January, USD 2.3 Million in February, and USD 37.7 Million in March, 2014.
During the same period, total domestic debt service involving principal plus interest payments, stood at K2.6 billion of which K930.8 million was a payment made in January, K887.3 million in February, and K830.2 million in March, this year, respectively.
Mr Yamba said both external debt adding with the US$ 1 billion Sovereign Bond and domestic debt levels remained below the international thresholds of 40 and 25 per cent, respectively.
“To ensure that we continue on this path, the Ministry of Finance will continue to maintain high standards of financial and economic governance,” he said.
He said precision in the implementation of development programmes overseen by relevant Ministries, Provinces and other Spending Agencies would be vital to ensure that projects, whose progress was constrained by rains, were now speedily executed in conformity with the Governments objective of widespread job-creation and poverty reduction.
Actions speak louder than words… Bring down the dollar then we will listen ………..
I am not surprised at all by these numbskulls who think that too much debt means economic growth. It is to be expected from these PF idi0ts.
How ever what is mind boggling is that these PF minions have no idea that the reason why the European continent ‘s economies were in a recession is because of too much debt greater than their GDPs. In a lay man’s language, to much kaloba does not mean the family income has improved. In fact it should instead sound alarm bells that there will be more trouble ahead.
PF have borrowed left right and centre and yet the majority of Zambians are feeling squeezed. The cost of living is on the rise while the standard of living is fast falling. In the UK when the government borrowed like that the cost of living was affordable.
Only HH and UPND…
PF is borrowing not to improve the lives of the majority poor, but to put more money in their pockets. They know that its not them who will be feeling the heat of paying it back but the next government of the day and the very poor.
Honestly there is something wrong with this picture, 30% of our GDP is held up in debts and the man is happy since he is yet to reach 65% of GDP. Yes, PF is using this 65% as a measure for them. Yet we have a record back in the 80s and 90s when the debt was chocking us, what was the percentage to the GDP then. It was not the 65% he is talking about, when need to learn fast and act on reducing this kaloba syndrome. Please spare the next generation by not borrowing at the rate you are borrowing.
To think that this good news is utter stupidity. I would have been the first one to commend PF if they had used that €750 million wisely, by buying new trains and extending the railway network to other parts of the country. But unfortunately, no one understands where that money vanished to if not into their fat international accounts.
I will not be shocked to hear that each top cabinet member will soon buy a personal helicopter or jet out of that bond money.
All this mess created by PF will be reversed by HH and UPND for they have a feasible economic plan. And maybe these hedge funders are buying Zambian debt like that because they are hoping to get their money back when a prudent economic manager like HH ascends to power by the time the bond matures.
PF CNP.
Out of turbulence? Have we repaid the debt? Suppliers are now at risk for the government to default on repayment of funds. If the government doesn’t become a good steward of these loans (through sustainable investments), we are in for higher taxes, which will reduce spendable income and thus also the flow of money or FOREX, which is a key point in improving our economy. And we will continue watching as the Kwacha continues depreciating…
This people, is the reason I keep advocating and insisting, debt is not bad for us, here we are now allegedly out of this turbulence, another reason of keeping this party beyond 2021 so that they may finish what they are doing.
If you are not impressed, you need a mental refit.
Thanks
Look at what chikwanda is boasting about? You are enslaving the future generation and making jokes out of it, shame on you.
@ Mushota, debt is only good for us if Zambia has plenty of revenue, mostly from natural resources, to pay for government services. Ask yourself, is our country in such a position? Yes we have copper but how much does the government get in taxes from mining companies to pay for government services?
@Reality
What services are you referring to, need I remind you I have CIMA, ACCA MBA and Msc.
Look debt is.
The gearing ie debt over the overall equity plus debt as a rule of thumb should not be more than 30%
Ofcourse I do not know what the gearing is at the moment. But to be closer to that threshold it is not
Only through mining that Zambia collects money.
They do this from taxes, (PAYE, Import etc, VAT). Mining is a dying source of revenue for the government
Yes I agree with you, but that should have no correlation on the debt and servicing of.
All countries and yes I mean the US, UK have debt, it is about having it under control, instead of it spiralling out of it
…
Stop listening to Wanzelu who is a sponsored PF cadre who talks rubbish after rubbish and it has become his cliché,
, the truth is, debt is good for us, as long as we use it to good use and are able to sustain it payables.
This government is not perfect, but that are not as bad as what is being reported by most people here, unwashed I must add
People who see things and call a spade a spade and are not as one sided in their views all the time like me,
Are people you should listen to and learn.
I am a rare breed on these blogs and should be adored and treasured, my loss here could catapult LT in oblivion. Again I am not thinking
Too much of myself,, just stating what you know but are too petrified to state it. 7 years on LT and still counting
#JustTheTruth
Thanks
@ Mushota, your reasoning leaves much to be desired with all those qualifications!
@ Mushota
Do you know what to do with your CIMA, ACCA MBA and Msc?
Put some Vaseline, it tends to be painful.
@Mushota
You have now just become the epitome of confusion. Since when have I been a PF cadre ? Unlike you I am not a cadre for any party but I fully support UPND and HH for what they stand for not for any financial gain. I am instead a donor to UPND not a scrounger like you.
@Mushota your blog about me has just confirmed the CONFUSION controlling your mental faculties.
You see , you are the one who needs a serious MENTAL refit.
I stop here instead of wasting my valuable time on a WIMP like you.
Grow up you freak of nature!
What if copper prices dropped below production costs,how does this PF government think this recklessly borrowed money will be paid back.Zambia depends on copper to a tune of 90% of its revenues and if some nasty happened to the prices,we are doomed.It is therefore silly thinking to use the so called international thresholds of 40 and 25 per cent for International and local debt respectively to feel comfortable that Zambia is doing well.Zambia should merely seriously upgrade agriculture and Tourism to number one investment targets and promote value addition in these two sectors as a lasting solution to our economic ills.
“The economy is heading out of turbulence as attested by the positive response of the international investor community following the issuance of the US$1 billion Sovereign Bond. The ratings actions of International Rating Agencies, Standard & Poor’s and Fitch were also positive factors to consider,” he said.
This confirms that these GUYS have been telling lies that the economy is doing well under PF. How can an economy doing fine come out turbulence or simply put confusion or commotion/disorder/turmoil? These GUYS seem not to understand what is supposed to be done hence yapping with all their uselessness. They need to be replaced before they mortgage our country. RUBBISH CNP, Ba Chumbu mushololwa.
Hahahaha. I like your observation Lion Katemba Chupo. PF always lives a lie. Only scatterbrains can still believe the PF lies.
You told us the same story when you got the Euro Bond! Did the economy improve?? NO NO!!! Stop the Lies and false economic projections please!!!!
So true
Does this mean total debt is about 30% of GDP?
above 32%
Is total debt 30% of GDP
I am not surprised at all by these numbskulls who think that too much debt means economic growth. It is to be expected from these PF idi0ts.
How ever what is mind boggling is that these PF minions have no idea that the reason why the European continent ‘s economies were in a recession is because of too much debt greater than their GDPs. In a lay man’s language, to much kaloba does not mean the family income has improved. In fact it should instead sound alarm bells that there will be more trouble ahead.
PF have borrowed left right and centre and yet the majority of Zambians are feeling squeezed. The cost of living is on the rise while the standard of living is fast falling. In the UK when the government borrowed like that the cost of living was affordable.
Only HH and UPND…
My take is that there was little publicity on the intention to issue another bond. However, if we already the money in our hands, let’s spend it wisely. I would rather all infrastructure projects are completed. The universities, roads, rail, power plants, new districts, water and sanitation etc. Let’s concentrate and do it right!
It is good reading. However, just keep in check any misuse, misapplication and/or misappropriation of govt funds. This is possible especially if corruption is indeed nipped in the bud. Financial discipline among nationals is key. Accounting for every ngwee well spent is a virtue. Go go go and develop my people, get civilized and get real development. That development starts with each one of us. So be honestly accountable with proper use of govt funds.
You honestly think they can do that? Have not seen the AG’s report. …who has been arrested after that report?
Chikwanda got us into a debt trap in the Kaunda days and has come back to re – write the story! PF is mortaging the country to sharks who will squeeze the life out of the this country and we have let the clowns do it to us! they must be gone in 2016. They have caused enough damage to our nation by putting it the hands of the foreigners, making us beggers in our our land and our children’s children will be so in decades to come!! A bunch of directionless loosers, is what they are!
The down side about democracy a sicko could vote in office, then it is too late ! Fix the process.
meant “voted in office”
SO THE ECONOMY WAS TURBULENT???
But the PF government has been telling us the the economy is ok and investors have confidence in the economy.
Just cant trust these grandpas in government—- why is it hard to tell the truth.
In essence he is saying he has solved the problem with borrowing and investor confidence when they have lent us the monies at 8% instead of 4%.
What kind of leaders do we have? How is going into heavy debt an indication that the economy is headed out of turbulence?
Keep pumping and borrowing after all to make money you need money.Next Loan on the line please!
I am a disappointed Zambian. Since when did kaloba end turbulence in any home. People who give kaloba (nkongole) take advantage of the borrower’s vulnerability. That is exactly what is happening to Zambia, it has nothing to do with confidence. We are desperate and on our knees. Mr. Yamba, please, tell us issues of productivity and export to stabilize th economy, not kaloba. It will be a short lived celebration like the last Eurobond. iliko bad.
Governments, like Zed’s, whose people object to government having no business in business, mostly depend on borrowing for their capital developments. Only if government had a direct role in the mining sector, whereby, most of the profits from the mining sector go into national treasury, would one hope that government should have sufficient funds for national infrastructure development, otherwise government simply depends on the revenue collection, VAT, PAYE etc. which in itself would never be sufficient against the monumental wage bill and other costs associated with management of government+politics. I see nothing wrong with this borrowing, it is needed and desperately so, if Zambia has to build itself a good basis for national development; infrastructure. However, Prudence is required
Next year is 2015 expect them to pump most of this borrowed money to complete single sourced overpriced contracts to woo voters…its wishful thinking to expect these empty tins to exercise prudence.
Borrowing your way out of a problem with budget deficits due to maintaining a bloated govt without check and balances.
A house wife who has never been to school can come up with appropriate solutions than these reckless empty tins we unfortunately have in utterly useless govt.
It pains me to read such careless utterances! !
*…..in this utterly. ..
Indeed the Muschi-otters of this world have never heard of Shylocking or ever read “the merchant of Venice” 🙂 These chipante-pante pfools are mortgaging our country and are driveling the minute a muzungu tells them their gearing is good and under the international threshold, Jesus Christ – that’s OECD stuff, G7 Level baba and their economies are humongous !
This is a clear indication of the blind leading the blind. This is an absolute indictment on the tenure of the PF and the policies of Michael Sata. Sata is a local government kinda leader and will attempt to develop the country no matter the cost, a wrong approach. When a government borrows money from external partners; it places the tax base as its security, with potential tax increases as further security. People wonder why the government removed fuel subsidies, the reason is that it was a precondition by the European Central Bank (ECB) for the initial Eurobond.
Borrowing is okay if we l have a way of paying back within a reasonable period.But the way our Government is doing it is not right.They are getting one loan after the other without repaying the previous loans in full.These loans have conditions attached to them which will make our future generations suffer because of this rekless borrowing.If our President want to Develop this Country it can not be done on income from Debts alone but from other investments like in Agriculture and other sectors of the Economy.
You are talking nonsense
Thanks
…atleast some-one has acknowledged that the economy is currently going thru a dangerous whirlwind turbulence…please inform the VP as well. The question is…how did we end up in such a turbulence…??…was it lack of weather forecast or geometrical challenge by the pilot and his cock pit crew??…or the ‘plane’ has been on auto-pilot all along…??
I do not appreciate wild open ended statements. Its not enough to just state that we are heading out of the turbulence, give us road map, a time frame. Give us a specific Month when we should expect to start seeing the Kwacha gaining grounds against the Dollar, essentials…mealie meal and the likes… prizes stabilising eventually reducing….Give us something to measure your statement with.
…or are you/we just hoping…
This news does not bring any hope to Zambians because we are still borrowing too much. There is no way this chap can tell us that our economy is headed out of turbulence on the basis of borrowed money. He should just admit that the PF has messed up and we are headed for doom. The PF has auctioned our country through this so called bond. We are simply mortgaging our beloved country to lenders who at one point in the future will demand for their money plus interest. So how can this idi0t say that we are getting out of a turbulent situation? Please stop propagating stupidit.y because we the people are clearly seeing what is happening. The PF has no clue of what they are doing. They have taken this country backwards and created debt that will enslave the future generation. This is very unfair.
So many educated fools here who cannot understand simple things.
We cannot develop without expanding the infrastructure in Roads,Universities,Schools,Hospitals,etc
Previously we were just 5 million people and today we are 15 Million in this Country.
And i ask, how do you hope to survive on the same infrastructure??
and i ask again, How do you hope to build capacity using Zambia’s GDP which cannot even sustain us because multinational companies cannot come and invest in a country without proper infrastructure.
Debt at this juncture in the history of Zambia is inevitable.
If you think otherwise, then you’re and educated fool, period.
Do not be naive. The economic payback period for building a road is around 20 to 30 years. If you live in Zambia you will observe that the economic payback for building the Great East Road is only coming to fruition now where companies operating at Arcades, Manda Hill for example are paying taxes and employing.
Development is not infrastructure, do not be deceived, development is a higher standard of living and a vibrant middle class.
The PF is building infrastructure in rural areas because they have an election in sight, not for any other reason.
By the way gogo if you build on credit you will need credit to maintain the infrastructure unless you work hard to build capacity to maintain which does not happen pa zed.
its amazing to c the level of economic understg of colleagues opposd 2our govt. hw does one fail 2appreciat that ovrsubscriptn is a sho of confidnc by investors in this economy. to stat wt these are business indvidls lookg 4 a return on their investment & wdnt risk their money on the country tht doesn’t look promisg enough to repay. can Barclays bank lend u money without understakg due diligence to assur them u hv capacity to pay. borrowg in itsef isn’t wrong can u compare yoselvs to mining congromelete or at a lower level to kavindele who borrows & u who doesn’t? govt realizes that expansion of business and establishment of industries hav bn hamperd by insufficient power supply & boro 2incres supply & in turn capacity of economy 2expand is that irresponbl browg? besids…
How can people take you seriously if you use text language for blogging?
& activities of the 80s cant b compard to the present therez mo today & with further inject of this 1b dollars there wl mo from which govt cn draw sufficient taxes and foreign exchang to repay the loans without much difficult. remember they are a lot of us local seating on the fence waiting anxiously to extend busineses, open up farms and industries in areas where electricity supply is lined up to be increased lik luapula and road and other lines of communication are poised to be extended, what about the foreign investors those are areas even the Chinese & others wl scramble to invest in. giv PF a chanc they mean well & so far are on course to transform ths country. VIVA PF VIVA SATA
Is there available space for a few more lunatics at Chainama?
Yes Job 13:13 there is only one more left that we reserved for you.
Pukucwe munyelela siliba !!! Just a few years ago we were told to tighten our belts … we went on a compaign to have our debts written off . Surely how can borrowing more be okey and even better the lives of the citizens of this nation?? Borrowing for a good cause is ok but if these debts are got for consumption then we are doomed.
This nation is blessed with abundant resources and peace but i feel the peace we have enjoyed is to blame for the kind of leadership we keep getting subjected to. Dont get me wrong … peace is good but its not ok if the masses are been taken for granted.