Government says it will use proceeds from the second sovereign bond to develop the energy and transport sectors.
Acting Finance Minister Edgar Lungu said in a statement that the funds will be targeted at growth-prompting projects in the various critical sectors of the economy, namely the transport and energy sectors.
Mr Lungu who is also Defence Minister confirmed that Zambia has successfully issued a second sovereign bond in the international capital market amounting to US$ 1 billion.
He said this amount is factored into the 2014 budget and the mid-term expenditure framework.
“Like the first sovereign bond issued in September, 2012, this bond has been a resounding success. The second bond, just like the first, was significantly oversubscribed, an expression and affirmation of the confidence the international investor community has in Zambia,” he stated.
“A team from the Ministry of Finance, Bank of Zambia and Ministry of Justice has over the past two weeks worked exceedingly hard to rally international investors behind our second sovereign bond,” Mr Lungu said.
He said the team has been complemented by local and international lawyers and equally significant book runners Barclays Bank and Deutsche Bank.
“I want to express our unqualified thanks to this team of men and women for their stupendous efforts, undivided attention to duty and providing the international investor community with all the necessary information on the Zambian economy which induced the confidence in Zambia resulting and culminating in the massive participation in the bond subscription,” Mr Lungu said.
Mr Lungu stated that the resources from the international capital market will help to accelerate the Government’s development agenda which already has had an impact and is acquiring great momentum.
He added, “The huge investments in billions of dollars in mining ventures in new frontier areas, and in corporate agriculture, are clear testimonies of the efficacy of our development agenda. They underpin our hopes.”
“I thank the Zambian people for their unfettered support of our Government. As a Government, we have a duty and obligation to deliver and we will, with your continued support, deliver.”
Once these P.F. Guys are out of office, I’m 99.9% sure there will be nothing to show for how this cash was spent. Problem of most African Governments.
However be rest assured the Politicians will be filthy rich!
you dont have to be sure,,,,, this is a jaw dropping case!,,,, red flag number one the money is be anounced by Uncle booze Edgar lungu in a wheelbarrow on duty,,, sivintu!
All this debt is what will make PF leave power quicker than they wanted to because if they start to default then investors will push for change of government fast so that they get their money back. In such circumstances they can even hire mercenaries to change the government so that the next government can stabilise the economy in order for them to get back the money.
Look at what they did to the Greeks and Italians. No mercenaries were involved because these are full fledged democracies. Now with Zambia, where democracy is dying out, the option will be to use mercenaries.
Mind you PF is not borrowing from IMF and World bank, but from hedge funders who can do anything to get their money back including with holding copper proceeds until the government pays back.
PF brace your…
I’am begining to like this guy Edgar Lungu.There is a reason why Sata trusts this man.Edgar is not one of the useless ministers Sata mentioned…..
Wanzelu my brother, that is not even far from the truth that outline you have stated. This PF government is playing with fire, and putting us in a desperate position unnecessarily..
Dear Mr Lungu, so you think “the first sovereign bond issued in September, 2012, has been a resounding success” !!!??
I would like to correct your complete ignorance on this point. The criteria of success is when these funds have been properly used, and have generated income for the Nation, and have been REPAID, with INTEREST, and Zambias debt has been settled.
THAT is when they are a success.
Borrowing money is easy. The hard work is PAYING IT BACK! What have you got to tell us about that?
Excuse my ignorance, but can someone educate me please which projects have benefited from the first bond? And also, what’s this ‘Acting Finance Minister who is also Minister of Defence’ thing? Pepe, iyayi, awe, we need order. MINISTRY OF FINANCE isn’t like a makeshift stall.
“I thank the Zambian people for their unfettered support of our Government……..”
Lungu stop hallucinating we do not support you mad style of borrowing. All you are looking at is how much will end up in your pockets through mare stealing of this cash, which will only be paid by the next generation.
what? Edgar lungu acting finance minister? where is ba chikwanda before we drink all the money in the cash box if there is any left??
@Ndobo what a risky to leave the kwacha in your hands with Edika Lungu, bwanwikwa .
FYI, Ba Chikwanda is considering retirement, he has had sleepless nights because of the free falling kwacha, especially when Sata (Ba) was away in Belgium.
Follow this noble rule below:-
Borrower, lender neither be.
If you BORROW money from a man – you make him your MASTER!!
If you LEND money to a man – you make him your ENEMY!!
Money and Friendship is like oil&water. When you fail to pay friendship ends.
Poor infrastructure has been one of the main constraints to growth for many African nations and in the last decade there has been a shift to invest more in these sectors. Its no question that money needs to be borrowed from the international financial markets to make these kind of investments possible. My only concern is that there does not appear to be any clear distinction in terms of specific projects earmarked for this. The last Euro Bond was supposed to support the development of the Itezhi-Tezhi Dam amongst other key infrastructures. It would be good to know exactly what additional energy and transport projects will be supported by this loan.
Olympia: I agree with you. This country was going really down in terms of infrastructure development. On the other hand, the activities and population are growing rapidly. We need funds to support such initiatives. The issue is accountability of these funds so that even when PF leaves office we shall be able to get hold of the documents to continue re-paying the loans.
without this kind of borrowing it would take the country 200yrs to make electricity available to all-so l welcome this bond sale
So Zesco can raise the rates 29% ??? And the mines can all move to DRC??
By then nobody in Zambia will be able to afford electricity!
Good job. I hope we haven’t spent half of that on paying this large number of people who helped us secure the bond?
We will borrow US$ one billion (1000,000,000 Dollars).
We will have to PAY BACK US$ one point eight six BILLION (1,860,000,000 Dollars)
In other words, nearly DOUBLE the amount Chikwanda has borrowed!
Is this what Sata and his PF call “development”??
I think it is only making us TWICE AS POOR!
@Ben, we’ll pay $1,086,000,000. its still alot
@ ben, you are right, at the end of it all this country will pay $ 1 860 000 000 after 20 years.
edgar lungu acting finance sure finshi ishibe
in our homes, if you survive through continuous borrowing, then just know that you will never come out of debt. as a country borrowing such huge sums of money is suicide. these chaps are proper 1diots I can assure you
Debt ladden, until bottom rock of HIPC. Things can go wrong with debt usually not in the short term but medium and long term. They start begging for forgiveness when their ability to pay back is over taken be interest. Lenders are always cool guys. They have it, just waiting for who to intangle in their financial cobweb. The spider then sucks blood until declared bad debtor. The easy option, borrowing, is always easier and enjoyable short term.
Zambia is really being shredded. The guy says the first Euro-bond was a success, and he doesn’t a mention even a single achievement from the Bond .
It’s now over 30hrs without power the whole mazabuka. What this means in most parts of the town is that there is no running tap water as well. Imagine!
Don’t mind that flag. I am in the heart of mazabuka, zambia.
Zambians talk too much without critical analysing what is being said from both sides. One moment you want Zambia to develop and with decent jobs. Another side of your argument is that it s not good to borrow and develop Zambia. Today we are able to appreciate the develop countries and like bush products . We fail to understand that these countries borrowed as much as they can UK finished paying USA under Labour govt from Second World War. USA is 16 trillion possibly more in debt . Zambia under MMD did not develop except UNIP times. Your argument are purely out of touch of reality. Even in a village people borrow to help themselves to be where they want to be. Judging PF before the finish their planned projects will like seeing a cow in another man’s field and think that cow is better.
compare apples with apples not with paw paws! USA is in debt because of wars (they invested in to cash in) not because of building roads,,
Then at some point those countries which USA `helped` in those wars (iraq, libya, afganitan,, etc) will pay USA back and USA will make 10 times of their current debt!
BA Pafwenemwine, I disagree with your observation.
We do bring valid/ analytical arguments to the table i.e,
Developed countries would have NEVER allowed Chiluba & his Cronies who were found “as guilty as hell” to enjoy fruits of their dishonesty, especially when these crimes are against their own citizens. They do take a more casual approach to international fraudsters/ Bankers conning others especially poor countries.
Our current constitution & poverty levels especially in Africa makes thieving by Politicians a VERY LUCRATIVE BUSINESS! With their absolute powers, control of State institutions i.e Army/ Police they become untouchable, unless removed via Revolution / Coup.
Before folk jump on their high horses, I’m NOT advocating for a Coup, just stating the facts
Continued;
so Mr Pafwenemwine, where are the Millions of USD Chiluba misappropriated??? You, Me & our children will continue paying for that missing cash, that was borrowed in the name of “Zambian Development”
YOU CAN NEVER PUT DEVELOPED NATIONS IN THE SAME BRACKETS AS US, UNDEMOCRATIC POOR NATIONS. The evidence is there for all to see!
I am startled You still feel these politicians who have a lying track record as long as your arm will borrow cash & develop Zambia, when the Current Constitution is so toxic towards transparency. Continue with this mindset, & we shall continue hiding in foreign lands as Second Class Citizens, because the option of returning to our own failed states is unthinkable. Sleep well Brother!!
Pafwenamine you must very young for you to give such an analysis.What PF is is rubbish,there are taking us back to unip and KK days.
Without KK borrowing their would no Kariba dam, No Kafue gorge, no UTH, no UNZA, no rail line, no road and you would probably be in the village.
@ spartan Get you facts right! The railways were built in 1910, before KK was even born! And Kariba was built in 1956, before Zambia even existed!
ben. I may haave quoted wrong examples but the facts are the same. Tazara was built by kk
Pafwenamine you see Dubai,China,india building because they can afford it, you should know America most places will increase your sales, or other taxes or fees to fund those projects, on the other hand we are borrowing heavily to fund poorly built
chinese infrasture, then comes the question how are we going to maitain that infrasture, Why can’t we find means to fund our projects, or engage private sector
to come and invest locally, what about the investors already in the country why not give them tax break if they can help develop some of those places, because there is no way PF is going to develop the whole country, it’s too big and vast
I think as a country we need to develop agriculture n tourism. These 2sectors ought to compete at par with copper in terms of GDP contribution. Please zambia give a good piece of the bond to those two sectors….to forever estabilise our kwacha, we need forex from those two areas… Cubans have no mines, but the money they get from tourism is 6times our GDP… We have ties with people, lets learn how we cn put zambia in a position to capture as many tourists…,
Well done GRZ. Get more bonds and restore our country. The complainants are the first to appreciate the roads and street lights. Next fix agriculture and bring down the cost of mealie meal to K50. My vote is yours again.
with $1 billion Eurobond in addition to $750 million earlier secured, Zambia is set for unprecedented development. Borrowing for development is good, borrowing for plundering is bad. Whether anyone throws aspersions or praises at PF government, the reality is that the developmental efforts they are making are being felt everywhere. Can anyone wrestle power from Sata and PF when we factor in the mamoth development that will be common place by 2016? Mukose baice mwebafwayo kuteka no tumaka twacimpelesha.
You can’t teach these villagers about complicated macroeconomics,quantitative easing or MTEF type of economics.They’ll borrow,leave a huge debt hole and have nothing to show for it.We’re doomed.
TWAFWA KUNKONGOLE !!!!!!!!!!!!!!!! INKONGOLE CHIFUNDA CHANSONI . THE NEXT PRESIDENT WILL REALLY SWEAT TO PAY BACK THIS MONEY . LEVY MWANAWESU TRIED TOO CLEAR BUT PF GOVT IS LIVING ON BORROWED MONEY EVERY DAY
You are doomed indeed with your myopic views on economic issues.
I agree with @Olympia… The biggest problem we have is LACK of SPECIFICS for why we are issuing sovereign bonds. If we can learn to borrow for well targeted/defined CAPITAL PROJECTS, Zambia would be unrecognizable in terms of economic progress in no time.
Let us first identify major areas which are impeding economic progress and then heavily target those. This, in turn, will ‘organically’ unlock other sectors. In my humble opinion, things like reliable energy (electricity, fuel/oil, etc.) and transportation(roads, rail, air) are crucial to any country’s developmental agenda. If we can target this bond at building huge dams and 21st century distribution infrastructure for electricity, and pick a different area next time, then we have moved Zambia many decades forward!
continue…
I say this because no serious investments will flow into a country where power outages and fuel shortages are the order of the day. Serious and high-economic-contributors such as High Tech and Manufacturing industries require 24/7/365 days uninterrupted supply of electricity. Any interruptions cost industries a lot of money. So to attract serious investors and corporations in “untraditional” sectors, dependable electricity is cardinal.
It will only be a pipe dream to attract and grow industries other mining if Zambia’s electricity infrastructure remains unreliable and unpredictable, no matter how much we sing to potential foreign investors. These people come from countries where things like electricity and transportation are an after-thought in doing business.
On average it has taken about 150 years for all the developed countries to be where they are today. Zambia is only 48 years old and some people want it suddenly to be like those countries…IMPOSSIBLE !. It takes hard work and working together sometimes even luck. Some of these countries took advantage of others to be where they are but unfortunately Zambia cannot take that route in this day and age.
Zambia is moving forward though at a slow pace but we will get there. All those saying MMD and PF have’t done alot to develop this country – Why are your Fathers,Uncles and even Mbuyas are able to afford a car from Japan and not on credit,something must b going right somewhere.
Lets borrow as much as we can if we can payback the money.
@John Chinena,please think again…..Singapore,U.A.E & Malaysia …how old are they?
Like I said its hard work!
Ba Chinena, with all due respect, there are several other countries who are as old as we are (Singapore, etc) that are doing far much better than us!
Besides, we stand a greater chance of “catching up” by simply adopting the current trends and technologies (new constitution, fiber networks instead of copper).
Having a government with a plan and vision is paramount so that they can create a roadmap for our development in the fields of agriculture, education, transportation, etc.
Should we use citemene system when we can use combines?
Should we use coal trains when we can use electric ones?
Should we continue to buy physical books from grade 1 to 12 when a tablet is only the fraction of the cost?
We can develop — we just need the will to do so.
#OneZambia
@ Maikalange you didn’t get my point .did you?
I said ………..”Zambia is only 48 years old and some people want it SUDDENLY to be like those countries…IMPOSSIBLE ! ”
I didnt say it cannot be done,but its through hard work not just working up in the morning and BOOOOM !! Zambia is a developed country like Singapore,..Thats never gone to happen.
If we can all work like the women selling tomatoes at John Chinena and still pay tax thats one why to contribute to development of the country.
1,750,000,000 dollars be shared equally amongst 2,500,000 household. It means every household gets greenback 700. Let us have a party.
Are the Chinese contracted by govt for projects or Sub-contracted by PF and its people? It is very worrying find out.
It should be noted that not every Zambian understands what this “bond” is about. It is basically a loan from the international community. With this in mind, let us be sure to invest the money in other money-making ventures and not for salaries or day-to-day operations for the nation esp since it is in US$ and not ZMW whose value fades faster than a pair jeans!
Notice also that we have two of these running in the few years that PF has been in power and it all has to be paid in 10 years. Most of PF will be dead in 10 years, so it will be you and me who have to pay this debt. Let us make sure we urge our MPs to use this money wisely.
We have the power.
#OneZambia
I don’t blame the sick PF government but the lenders. Records are there for reference. Which African country ever accounted for those borrowed monies?
More than 40 protesters today April 9, 2014 demonstrated outside the Zambia High Commission in London, reports Marriam Rose for Zambian Eye in United Kingdom.
The Protesters from Foil Vedanta(1), the Afrikan diaspora(2) and other organisations in London chanted, played drums and displayed banners and placards.
They demanded that some of the revelations in Foil Vedanta’s groundbreaking report Copper Colonialism: Vedanta KCM and the copper loot of Zambia(3) are addressed by Vedanta and the Zambian government, and asked the UK Government to formally investigate the company. Meanwhile Vedanta may be about to de-list from the London Stock Exchange as Chair Anil Agarwal becomes the 70% owner by buying up shares in the suffering company.
Protesters at the Zambian High Commission today…