Finance Deputy Minister Miles Sampa says government will continue contracting foreign loans because it is in a hurry to develop.
Mr. Sampa assured that the country’s debt sustainability position is very healthy to warrant further borrowing.
“We are sitting around 30 percent of GDP ratio and we would be comfortable to increase that to around 45 percent of GDP and we would be going back to the international market as soon as all arrangements are put in place,” Mr. Sampa said.
He said the US$ 750 million Eurobond was so successful that it has given government the impetus to go back to the market and borrow additional funds.
“Our debut issuance was very successful, remember it was oversubscribed and we believe the interest in Zambia among the foreign investors is still high and we want to cash in on that,” Mr. Sampa said.
“We should not be scared to borrow as long as we are able to pay back.”
He said government wants to ramp up investments in key infrastructure developments such as roads, rail and energy hence the need to borrow more.
“We have said no to increasing taxes for our people because we are a caring government.
So taxes won’t go up and our only choice is borrowing from the market. There is no country that does not borrow, the USA, Japan, name them, they all borrow to develop but what is important is paying back.”
Mr. Sampa reiterated that the entire US$ 750 million Eurobond has been exhausted.
“Yes the money is finished because we dispensed it to spending agencies and we have done well on that’s score.”
He said, “Zambia Railways received $120,000,000 while Development Bank of Zambia received US$ 50,000 with the UTH getting $30,000 towards the rehabilitation of the country’s largest hospital.
“Everybody has been complaining about the state of UTH and we saw it prudent to spent US$ 30,000 on rehabilitations there in order for the hospital to serve our people better.”
The Finance Deputy Minister disclosed that the largest chunk of the Eurobond went to ZESCO for its equity in the Kafue Lower Power Station and other ongoing power projects.