Zambia’s US$1 billion bond and the US$750 million bond are performing well, making them the best priced bonds amongst African Sovereigns.
In a statement released to the media by Ministry of Finance Public Relations Officer, Chileshe Kandeta, Government said that conditions in the International Capital Market are tapering the performance of Zambia’s two Sovereign Bonds.
According to a market assessment for May/June, Zambia’s US$1 billion bond which matures in 2024 is trading at 107.13 percent. This makes it one of the best priced bonds amongst African Sovereigns.
As at 16th June, 2015, the yield rate for the US$750 million bond stood at 6.97 percent. On the other hand, the US$1 billion bond yield rate was a much improved 7.38 percent compared to 8.625 percent at issuance in April, 2014.
” This trend is within an acceptable trajectory and also signifies the robustness of Zambia’s economic transformation program, ” read the statement.
” It also manifests the steadfastness of the confidence that international investors have in the consistency, predictability and direction of our policies towards socio-economic stability, ” concluded the statement.
Yesterday, Finance Minister Alexander Chikwanda said Zambia will return to the international capital market for fresh borrowing following the widened budget deficit in the first six months of the year which has risen to K 20 billion accounting for 18.5 percent of the GDP.
Mr Chikwanda told Journalists in Lusaka Wednesday afternoon that Zambia is definitely issuing a third Eurobond in four years but refused to confirm that the country will seek to borrow as much as $ 2 billion.
The Zambian government has raised $1.75 billion in two separate Euro bonds since 2012.
And Open Society Foundation is dismayed with what it has described as government’s insatiable appetite for borrowing.
Executive Obbious Chikombola says his organisation is left wondering as to whether the answer to the country’s fiscal quagmire rests entirely on the backbone of borrowing.
Mr Chisala says the effects of gross borrowing are not new to Zambia, stating that it was a s a result of borrowing that the mines were sold for a song due to pressure from the International Monetary Fund and international lenders.
He adds that it was due to this high gearing ratio that Structural adjustment programs were imposed on Zambia which in turn exacerbated the poverty rate in the towns and cities.
Mr Chisala says Open Society Foundation Challenges the government to tell the people of Zambia how they have used the $1.750 Billion Eurobond before they contract the $2 billion euro bond.
He notes that borrowing is no bad provided the money borrowed is channelled towards infrastructure development and capital projects such in the transport and energy sectors.
Mr Chisala says the concern is that $2 billion Eurobond issuance is being planned in response to the looming budget deficit of K20 billion.
He says the country Cannot afford to borrow for consumption, and has since challenges government what expenditure constitutes the K20 billion deficit.
Mr Chisala says his organisation will support the government only when they provide a detailed analysis of the expenditure to which they intend to channel the said Eurobond money.
Ba Chileshe Kandeta, ikalenifye
ifintu ni Lungu, we voted for more borrowing
Government PR gimmicks in effort to damage control following the badly received admission by the Finance Minister that Zambia is broke.
There is no pride in getting Kaloba, for whatever the purpose. Make and use your own money from own resources and initiative and then you can walk and hold your heads high.
I recognize a heap of cow dung when I see it!
Too little , too late. We head the Minister of Finance in parliament and we have read the World Bank and IMF Reports. Economic is collapsing right in front of our eyes
Let’s see Jamasoni Lungu Kolopa the national debt
Before you take advantage of the Zambian people lack of understanding of the terms like yield rate, lets have an open book with what happened to 1.75 Billion.
Second , when you are in a deep hole like Zambia is, the last thing you should be asking for is a shovel, we need a ladder to get out of this Greece borrowing habit, its harmful to the nation.
The real “yield rate” you should be talking about are the loses the country has incurred due to depreciation of the Kwacha. How much Kwacha do we need to service the interest rate compared to the time when you singed the last kaloba.
In the picture above, I can see two Bembas with their mouths open, handling Zambia’s cash………………………
Thanks for the news LT, but what is the editorial team up to?
How can you write ‘Zambian’s’ instead of “Zambia’s”?
Pay attention to your edits, you have a great potential to be a hugely popular provider of news at home and abroad.
Don’t get upset or discouraged, just pay attention to these matters and you will continue to do great.
Do these people have any shame? its only doing well in the area of making you bellies bigger and bigger. Ampimpipo (pilato) must hear this.
Serious question. What has prevented Zambia from developing? Serious question. Is it the Governments, or us as a people’s lack of checks and balances for electing officials. E.G Who voted for Kambwili and that guy that faked his diploma?
Viva President Nawakwi.
Its because its managed by baboons
Ghana elected baboons into government look where the are… back on IMF structural Adjustment Programme (SAP)
You are also heading the same way…
Thanks God i left during the first SAP not looking to return anytime soon… will be watching you on CNN
Micheal Sata train has followed the name sake as its now packed in the workshop after wasting euro bonds on it.
No subsidy,wage free and loans but no results then you want to borrow again for your pockets.We shall say no til an audit is done.
Zambians let us stop this careless spending
Yes, how cant it be performing will when you know that any float brings more then $350,000 in your pocket? Shame
ati the bonds are the best priced bonds amongst African Sovereigns.
I will not even begin to pretend that I understand what the hell that means.
Fooolish chap! Just parroting nonsense like his pumpkin uncle passing gas. Whoever will subscribe for this bond isa foool. It is so risky to lend money to zambia. If it does happen, i bet u the interest rate will be very high. Some of these things, put your tail between your buttocks and consult pipo like HH, Mutati,
Yes performing well in your stomachs
Ba Chileshe Kandeta, who are you cheating ikalenifye,
Muleisebanyafye, what economics did you study, iya muma paper? Out you are going!!!!
Chilehe Kandeta is just a Marketing Diploma holder from Evelyn Hone 1993 shoot. If he has any grauate qualifications its from these mushrooming universities with no real value or through the cheap online correspondences courses now offering degrees merely when one pays.
Real graduates sit behind the desk for at least 4 years at UNZA, CBU & now Mulungushi? You can’t pass courses like M110, P110, B110, C110, M240 in our time 1989-1994 through correspondence. Impossible! Of course even at these quality universities underhand methods are used to obtain papers i.e. bottom power & rarely ‘bugs’. The rest of universities, kuwayawafye! U don’t u feel proud to be a graduate from any of these mushrooming universities.
The statement has a lot of spin. Indeed from the investors view point, earning 7+ Percent is super. From our view point, however, paying interest of 7+ percent on $1.75 billion involves a cash outflow of about $122 million a year, or $61 million for every six month coupon. Now think of this in the context of a depreciating kwacha. Over K900 million a year!
So now double this cost if you borrow and other $2 billion.
Awe shuwa, ifintu ni Lungu!
Haha,ati Zambian bondage to these Int’l banking mafias trading well.
Soon they’ll be seizing Zambian assets like they did to a war ship docked in Ghana from indebted Argentina.
It’s all smoke to hoodwink the pipo. Speak in clear terms for the common man. You get away with this hoodwinking because the electorate is illiterate, just tell us how much interest our children will have to pay.
This Chikwanda said the objective of the new Euro bond was to close the widening
Budget deficit of K20 bn. He also said they where exploring all borrowing options and ask parliament to raise the debt ceiling.
This is what happens when there is lawlessness in the country. People have been singing about the constitution for donkey years. How can a budget deficit necessitate borrowing? Does this chibwi or any body in this God forsaken government understand problem solving? This Chibwi must know that Zambia is not facing a tempory deficit but a permanent. In the words structural deficit which cannot be solved by borrowing but real government reforms and fainess.Many a blogger on this forum have provided plenty of solutions, I do not need to repeat. This is a racket.
Zambians we must rise and stop this wanton theft of public money. A good for nothing, corrupt government defrauding its people in broad day light.
Just like my name!
The Europeans, Asians and American’s who are buying our debt are already looking at what assets they will grab when the time comes for payment.
They have people on the ground who are prospecting our land to see where the gold, copper, cobalt, coal, emeralds… are located. When we fail to pay they will simply tell us to give them the prospecting licenses to these places.
Think I’m wrong, just wait.
Borrowing just in time for elections, Pf is broke they need funds to campaign
I never knew this habit of lying to appease oneself is at government level but hey – the people make the characteristic of everything, right? When I moved to work in a country nearby, I was once told that I should borrow to buy a car (“Here you can get a flashy car”). “It is easier if you borrow for 4-year payment instead of 2. Don’t even consider paying cash; that is hard on your pocket.” I didn’t borrow, and didn’t bother, but my advisors started coming over to borrow for sustenance because “vima loan mudala vatipaya! I will pay you back soon.” I never saw most of what I eked out (of course knowing it would never come back; I never lent more than I could stomach). That is the short story of how we are getting ourselves into a debt trap with this administration. It is very…
My concern is col Garry chanda who seems not to care for the 55 road which has damaged our cars due to very poor state of the road in his constiuence.Where is cdf money to improve the road.Elections period is just around the corner and this mp is not improving anything.What are you doing and we are watching you.shame.the best is the people to vote you out
Chileshe, tell ba Chikwanda to be talking about getting rid of all the deputy ministers, District Commissioners, Closing some an strategic embassies, reducing the ministers car to one (1), deferring some an strategic road construtions, staggering the proposed construction of universities and stadiums, etc instead of borrowing. You can’t afford to live a luxurious life when you are technically broke.
It is always bad news, when someone is trying to borrow because they can’t afford to pay of their creditors.
Borrowing to expand a successful business that can’t keep up with demand is good. Borrowing from Peter to pay Paul is a bad thing.
Here is my ultimatum – if the IMF/World Bank do not demand transparancy in borrowing and spending, all the debt is odious, and should not be paid back. Ever.
Google: odious debt