Zambia’s external debt as at end of April, 2014, stood at US $4.2 Billion or 22% of GDP whilst domestic debt stood at K20 Billion or approximately 16.4 % of GDP.
Secretary to the Treasury Fredson Yamba in an update on public debt status says both external and domestic debt levels remain below the international thresholds of 40% and 25%, respectively.
Mr Yamba said that for the period from January, 2014, total external debt service, principal plus interest payments now stands at US$52.2 Million of which US$2.6 Million is a payment made in April, 2014.
Mr Yamba said that according to current projections, the total external debt falling due over the next 12 months stands at US$ 249 Million or 1.3% of GDP.
He said that Government has continued to observe international standards of debt management; consistent with the commitment to maintain strong credit worthiness and safeguard macroeconomic stability.
Below is the full update
UPDATE ON PUBLIC DEBT STATUS AS AT 30 APRIL, 2014
Lusaka, 22nd May, 2014. Government has continued to observe international standards of debt management; consistent with the commitment to maintain our strong credit worthiness and safeguard macroeconomic stability.
As at end of April, 2014, external debt stood at US $4.2 Billion or 22 % of GDP whilst domestic debt stood at K20 Billion or approximately 16.4 % of GDP. In this regard, both external and domestic debt levels remain below the international thresholds of 40% and 25%, respectively.
For the period from January, 2014, total external debt service (principal plus interest payments) now stands at USD 52.2 Million of which USD 2.6 Million is a payment made in April, 2014. According to our current projections, the total external debt falling due over the next 12 months stands at USD 249 Million or 1.3% of GDP.
The current composition of the total external debt is as follows;
Legend:
USD – United States Dollars
EUR – Euro
CNY – Chinese Yen
SDR – Special Drawing Rights
And for the period from January, 2014, total domestic debt service related to Government securities (principal plus interest payments) now stands at K3.2 Billion of which K544.6 Million is a payment made in April, 2014. In the same month, Government issued K458 Million Treasury Bills in the domestic market. According to our current projections, the total domestic debt falling due over the next 12 months stands at K9.8 Billion or 8% of GDP.
Although the economy is steadily gliding out of turbulence, the Treasury is gravely concerned with reports of financial mis-representation in the private sector and the mining industry in particular. Apart from specific actions which will be taken to correct erring players, we are confident that once the programme on monitoring the mineral value chain is fully functional, coupled with our commitments under the Extractive Industry Transparent Initiative [EITI], holes in the system will be plugged and the people of Zambia will begin to get the full value of their interest in natural resources.
The Treasury appeals to all citizens to be vigilant and to ensure that while allowing an enabling environment for lawful business and entrepreneurship to thrive, cases of financial fraud should promptly be reported to relevant authorities. In this respect, organisations such as the Zambia Institute of Certified Accountants and the Zambia Institute of Internal Auditors are expected to take leading roles in fostering private sector transparency and financial accountability.
//SIGNED//
Fredson Yamba
Secretary to the Treasury
MINISTRY OF FINANCE
I have a mortgage and debt yet I am happy
Zambians should not wort about this debt at all
Thanks
So why are civil servants not being paid on time if the government has borrowed such a huge amount of money. Where is the money going?
Its just one day when the truth will be squeezed out of these PF minions.
Only a crazy irresponsible, unwise and probably one who knows is dying tomorrow with no one left behind would be happy with a debt. A borrower will always be a slave to the lender .
To me it doesn’t really matter whether GRZ is servicing its debt or has kept it below the international norms in relation to country GDP – Mr Yamba’s arguments or assurances are all academic as long as Zambians don’t see this borrowed money doing its rounds in our pockets. What’s the point in borrowing Euros and redirecting them to China through construction contracts? Since Zambians will be responsible for repaying these debts, it’s only logical that we demand that the businesses to whom govt tenders are awarded be at least 70% owned by indigenous Zambian citizens who are proven to factually have financial powers both in voting and managing the companies’ bank accounts (proof of such signing powers from their respective bankers should form an integral part of tender adjudication)!
Wanzelu you really try to be relevant but unfortunately you are failing. I normally would not reply to your hateful comments but I am forced to comment because I am a civil servant. DON’T comment on things that you don’t have information on. I am not defending these guys in government but I just want to let you know that civil servants in Zambia get paid way before the 30th. Salaries are deposited in people’s by the 19th. So stop your lies. Find other things to criticize the government on. Not on salaries.
@Wanzelu is right they are not paid way before but a month behind thats why you think you are paid earlier,just check your payslip.
Which one should you be concerned with, national threshold or international threshold?
I beg to differ this “international threshold of debt” does not exist there is no such thing. You will look in any economics text book you will not find it. Different countries have different capacities to bear external debt so we cannot have an “international threshold”; besides different countries borrow at different rates and terms. What is there is what is called Debt Sustainability Framework” (DSF). The debt sustainability framework is designed by the World Bank and IMF to guide the borrowing decisions of low-income countries in a way that matches their financing needs with their current and prospective repayment ability, taking into account country’s circumstances
CNY is not Chinese Yen, but Chinese Yuan. Ba LT, wake up!
the jump from 0 to $ 4.2 billion external debt was rapid.
It is not the threshold but the trek hold, the acrimonious rate at which Zambia is borrowing, that is the cause of the diarrhea. Zambia is acquiring debt too fast and with nothing to show for it, as if the world is ending tomorrow. In an economic down-turn, as is usually the case, the country will not be possessive of a structure strong enough to support the acquired debt. The country just came out of a similar situation not too many years ago.
A newly married couple just starting life may argue that five kids are not too many to have. While that may be true, the economic dynamics in that family could change drastically, should they decide to have a baby every year, which is possible! At that rate, they must be prepared to send three to four kids to college concurrently at one time. Quite an unfathomable a feat!
But things could get even worse for this couple. Suppose the main bread winner loses his/her job or is disabled, then what? Therefore, logical though it may be that five kinds are not too many for that family, spacing is crucial. A prudent couple deciding to have five kids will have to plan on spacing their children. This alone can make a difference between being rich and being poor.
How come every statement from a PF government official does not make sense. Don’t these people have even one smart person in their ranks?!!! How on earth can a government issue such a stupid statement. Do they understand the implication of debt on a country, what is worse is that whatever money PF is borrowing is just being stolen or wasted on projects that do not make sense, and projects whose work is shoddy.
Minister of Finance is clueless about Debt accumulation and its impact on the country’s future. The technicians are also not telling politicians the truth, of they are, then 2016 Pa Nkoloko!!!
Useless ministers, do you mean your aim is to borrow untill you suffocate the GDP. Totally irresponsible
Surely, even if we have been told we can borrow up to 40%, it does not mean you have to peruse every means possible to get the whole 40%, only a person not in their right mind can do so. It’s the future reparactions these debts are bringing to not only the future generations as some correctly put it, we can already feel the impact now! I.e look at how much kwacha has lost value, what about the price of ubunga which was at K38 and is now at 70-85 Kwacha, fuel? What government must know is that no government ever prospered through borrowed money but rather on sound fundamental policies among them include the constitution which is ‘hidden’ at the moment. Building roads, hospitals on borrowed money when we have natural resources is no prosperity at all, it has no sustainability in itself.
GRZ officials are even getting bonuses for finding the best borrowing sources.
Our neighbor borrowed $50 the average person in the community borrows $70. Even though we are among the five poorest households, if we borrow $50 like our neighbor ( who runs a business, has assets and is richer than us) it is still okay. Even if my parents worked hard to get us out of debt, it is okay. By the way when we get the money we should go to hungry lion everyday – not buy some merchandise to engage in business.
USELESS THINKING BY OUR DULL GOVERNMENT…SHOULD THE INTERNATIONAL THRESHOLD BE OUR YARDSTICK? HOW ABOUT OUR ABILITY TO REPAY? YOU ARE BORROWING THE MONEY SO YOU CAN STEAL AND BUY EXPENSIVE CARS FOR YOURSELVES. BEHOLD THE DAY OF KUULULA IS COMING!
Smart looking face, powerful hair-cut, expensive eye glasses but small brain, I reckon?
Spot on! I used to think this chap was clever but they’re all cut from the same cloth!!!
Imwe! You need to understand that in order to fit into PF, you need to subdue whatever intelligence you may have once possessed. Iyo ni mandatory requirement ka.
@dudelove: Who performs the brain surgery? LOL!
@‘below the international thresholds’. Well your poverty level are also ‘below the international thresholds’ so yes you can’t borrow like you have the means to pay back. What does that even mean? Do you want to equate your debt numbers to countries like the US and other European nations?
Just because my neighbour next door who has millions of assets has borrowed 2 million dollars to finance his mortgage, I also want to do the same because I have a rental debt of $100 dollars. I know he is talking in terms of percentages but it doesn’t matter.
And why do we have 2 Bilateral Paris Club in there? Also why do we have a debt for Export Credits? Isn’t ‘export credit’ supposed to be our income?
Lots of g@bbage coming from the PF govt as usual.
An Ostrich’s brain. All they know is borrowing. They found US$2.5 Billion in the treasury. They squandered it and have gone into kaloba of US$4.2 Billion in 2 years. This is madness.
Mr Yamba stop this below ‘international threshold’ nonsense of yours! What we need to look at is the capacity to pay back this debt with interest. The international community you want to cling on to have better economies with vibrant industries and notable exports. Zambia has no industry worth mentioning here as we have to import basics such as toothpicks! Remember the debt cancellation campaign under HIPC? For us to comfortably talk about debt repayment we need to have more exports, more jobs – not cleaning streets and constructing Chinese roads but jobs that are permanent and for which workers contribute PAYE to the treasury. Cleaners on the streets and most workers you boast of having employed earn below K 3,000, the PAYE threshold. They don’t pay tax!!
What is the difference between Paris club 1% and Paris club 3%? Are these figures cooked up?
The loan agreements differ in costing, settlement & finer details
The only debt we owe these clueless PF losers is kicking them out in 2016.One dollar of debt equals 4 votes against PF.
I must say that the issue of debt is of common premise on the global scene.However,the prudent application of resources to capital projects that stimulate the economy is what matters.Our economy is based on consumption,this is the main problem when it is supposed to be based on wealth creation.A vision with no proactive action costs a lot more than we think.Let us begin to take control of our destiny as a nation by applying our minds to do what is best for this great country of ours.Its a pity politics is now the main hindrance to all well meaning ideas.
Kaunda era $7 billion in 27 yrs
Pafwaka era $4.2 billion in 2 and half years
Spot on Zaks. And at $7bn debt stock we were classed as Highly Indebted Poor Country. We are now slowly stitching ourselves back into that bracket again. God help us.
This stu.pid man must stop telling us this nonsense and instead address the continuous slipping of the kwacha. We are fed up of being subjected to these stupi.d statistics when the actuals on the ground say otherwise. We want these idi0ts to address the weakening of the kwacha, not how we are still within the borrowing threshold. All of us know that whether within the threshold or not, borrowing has never been the right option because we may fail to pay. Right now our manufacturing sector is dead and hence we are not generating that much wealth to match the levels of borrowing that we have so much come to cherish. Who will rescue us from these crooks?
When it comes to debt contraction you make reference to international standards but when we talk about international norms in governance you are mute what kind of Govt. is this? Your debt levels can only be compared to international standards if you have capacity to run financial affairs prudently. For now it is a sorry state of affair. It is even worse that the cartel within your PF party is holding Michael Sata captive for their own selfish ends. The man should be left to rest and not to be left to wonder in the wilderness so that you chaps keep on eating. It is shameful. HEMCS is not well he will not make any useful deciscions for our country.
Why is the debt soaring so fast?
Who sets the international threshold, if there is any? The IMF and World Bank say the zed boma has overborrowed. Are they not aware of this threshold, if its there?
Zambia is being sabotaged by the IMF/World Bank, and they have inside help, in the form of our finance ministers.
The IMF/World Bank want to keep all countries in debt to them, so they can tell them what international and domestic policies to pursue.
So whenever debt is canceled through HIPC, they make the country take on more debt. They forbid and sabotage heavy taxation of the mines, and are the first to support taking on these billion dollar bond issues. In the words of Situmbeko Musokotwane, “You can always borrow.”
You have to wonder out loud – why so much pushback on the windfall tax, and so much support for bond issues? Before anyone knows what the money is going to be used for?
That’s the game that is being played, and it has to end.