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Alba Iulia
Wednesday, February 8, 2023

Zambia’s Debt position far below internationally accepted threshold-Chikwanda

HeadlinesZambia’s Debt position far below internationally accepted threshold-Chikwanda

Finance Minister Alexander Chikwanda addressing accountants during the ZICA annual ball dinner at Zambezi Sun Hotel in Livingstone
Finance Minister Alexander Chikwanda

The Ministry of Finance says Zambia’s external debt currently stands at 4.8 billion United States dollars representing about 18.5 percent of the GDP.

The domestic debt standards at 20.5 billion kwacha representing about 14.2 percent of the country’s GDP.

Finance Minister Alexander Chikwanda told parliament that the total public debt is around 32.7 percent GDP.

Mr Chikwanda said the country’s debt position is far below the internationally accepted threshold of 40 percent.

He said the country’s debt position was confirmed by the results of the Debt Sustainability Analysis undertaken in June 2014.

Mr Chikwanda said government was not complacent as it takes issues of debt sustainability very serious.

Meanwhile, Mr Chikwanda says he has set up a sinking fund for the purpose of repaying the two sovereign Eurobonds amounting to 750 million and 1 million United States dollars.

The two sovereign Eurobonds were issued on the international capital market in 2012 and 2014 respectively.

This was contained in a mid-year economic and budget review statement made available to media by the ministry of finance.

Mr Chikwanda explained in the statement that the funds from the sinking fund will be used to repay back the Eurobonds.

Mr Chikwanda further disclosed that the sinking fund was set up according to the provisions of the loans and guarantees act cap 366 of the laws of Zambia.

Meanwhile, Government has disclosed that the 2016 National budget preparations have commenced and the ministry of finance is expecting members of the public to participate in the formulation process by submitting proposals that will contribute to the 2016 economic program and the medium term outlook.

Government has since appealed to all stakeholder groups to publish their budget proposals to government in advertorial format so as to accord the public the benefit of understanding the unabridged thrust of their ideas.

Meanwhile, Finance Minister Alexander Chikwanda has reiterated government’s commitment to economic policies for 2016 and for the medium term saying the duo will be anchored on fiscal consolidation, policy consistency and economic stability in order to provide an environment for investment, job creation and wealth-creation.

He encouraged the public to submit proposals and ideas on tax and non-tax policies as well as on public expenditure policies whose target should be to facilitate achievement of the country’s economic and poverty reduction goals.

He said this in a statement made available to ZANIS by Ministry of Finance Public Relations Officer Chileshe Kandeta.

And Secretary to the Treasury Fredson Yamba says government is concerned with touting of miss-information on tax and budget matters in Zambia, including some analysts representing foreign and international organizations.

He added that the current budget consultation process avails the public an opportunity to engage with interests groups and the government to ensure that there is harmony in understanding what needs to be done to better the lives of citizens in Zambia.

Mr Yamba urged interest groups to hold public forums at which their unabridged budget proposals should be availed to interested citizens before being forwarded to them Ministry.


    • That is the problem. PF and Chikwanda don’t seem to know the problem. The problem is you can’t borrow your way out of problems. PF are borrowing to but cars. Honestly, why should we borrow from the international market to buy cars for govt functionaries? Check the Daily Mail today and see the advert for the GRZ cars. This is shameful. 2016 is too far

    • God Bless Africa!!!,

      How can 32.7% be far off from 40% (40 – 32.7 = 7.3). And 7.3% of our GDP is about K10 billion, then why borrow if this figure can not even solve the problems at UNZA?

      These people know that they will not be there tomorrow, so they don’t care.

    • Bashi Bwembya aka A. Chikwanda, just because the debt threshold is below the internationally accepted threshold of 40 percent doesn’t mean you should work hard to reach it by borrowing more, even though you don’t have the means to pay back. What sort of thinking is that?

      All the hard work to reduce the debt that Mwanawasa embarked upon has been erased/undone by PF within 3 years because of not understanding the implications of senseless borrowing.

      Now whoever will form the next government has to embark upon the same process of reducing the debt all over again. What a waste of time!!!

    • Well, there’s a fundamental problem here. Chikwanda’s lifespan is less than the Eurobond repayment. Meaning Chikwanda won’t be there to witness a Greek style of economy where pensions, salaries and essential commodities will disappear on the shelves. Edgar Lungu has a borrowed life, he seems to have spent more time mending his failed health than looking at the accounts of the country. Chikwanda must be fired without hesitation to salvage the little remaining sense if at all there’s any left. Fossil economics of the UNIP era being used in this digital time won’t work at all. An Apprentice President being coached by Fossils with mwashibukeni degrees won’t work. Kaloba, and more Kaloba ummm.

    • Lwando,
      Do you realise how many uneducated people will vote for this government next year? Most of them will not even understand what the impact of this borrowing is. They are just seeing roads and stadiums that are being built at inflated prices and that’s enough for them. Every election year we have a new slogan. From “it pays to belong to UNIP”, “The hour has come”, “New Deal”, “Donchi kubeba”, “Seleni tubombeko”, “Kolopa.com”, up to “Ifintu ni Lungu”, we are being scammed and we like it. Economics is too complicated for most Zambians so they’d rather discuss who is “dying first”, “will never rule Zambia”, “under 5”, “politically finished”, etc. That is the reality (whilst the interest on these loans simmer and make the loan sharks smile).

    • And of course, the slogans are always accompained by songs and music videos! New ones are coming next year. Just sit back and enjoy.

    • PF with its Chikwandanomics have really hit a snag financially. PF does not know where to get the money to fund their unplanned projects plus their bloated civil service at the time Zambia ‘s productivity has ground to zero.

      All the donors want PF to publish evidence of how the £1.75 billion dollars was spent before approving any supplementally budget donations.

      Its funny how PF now wants the interest groups to contibute in helping it make a case for donations but when the same groups appeal to government to cut reckless spending on bloated cabinet and civil service and stop stealing, PF does not want to listen.

      PF you created the mess and so sort it out on your own..

      Only HH and UPND can restore Zambia ‘s financial credibility.

      Viva UPND, and HH is the president…

    • Critical thinking mudala tapali.
      He should have stopped to consider that the rest of the world is not currently in the best financial shape and is struggling to come out of a recession. This primarily caused by unsustainable borrowing by governmnets and the financial sectors in these countries. Not even the US was spared yet he wants to use their failed benchmarks to set the standard for borrowing in Zambia. Can we not just stop and think for ourselves for once? Are these the symptoms of having a dinosaurs in sensitive positions. If it weren’t so alarming it would be laughable. This time the joke is on all of us for falling for this trickery and voting them again.

  1. Here here, monsieur Minister of Finance
    Tell the country.
    They never believed in you?
    Then their education level is low. They were educated when teachers were on trike, WHAT DO YOU EXPECT.
    Zambia is on the right track.

  2. Where ever some of our minister hail from at times, I wonder how their homes or cities and provinces are managed.

    If you are a successful wheat and barley farmer. You slowly add millet-Soya beans for crop rotation. You don’t simply plant all crops together. This is nonsensical thinking that Zambians have to rid off now!

    Viva President Nawakwi.

    • Well just comment without bring your Nawakwi on this issue because she is one of the worst finance ministers we have ever had. If she had any morals she could have already disappeared from the political scene.

  3. Mwanawasa left us with an external dept of -0.20 percent. In short we had no dept, more so we had a GPD that far out performed any loans and grants Zambia was getting.

    Viva President Nawakwi.

  4. I can’t believe what I am reading.

    Ba LT, are you trying to wind us up by adding your own spin to this story or did this Chikwanda actually say this and hidingbehind jargon?

    How can he give the crippling debt Zambia is sleep-walking into a positive connotation as if it is a good and exemplary achievement?? Now I am truly worried. I smell a rat. A BIG rat. Watch this space.

    Forming a sinking fund? How do you form a sinking fund from BORROWED money? It means you are already sunk you*!”~#¬` individual!.
    That’s it. This guy has crossed the line. He has to go, else our Country is in deep ~=i#!

    • External or internal, what is the difference? Borrowed money is the money which will need to be re-payed. If to day you have problem servicing debt, then how will you repay bigger debt tomorrow?

  5. Finance Minister Alexander Chikwanda told parliament that the total public debt is around 32.7 percent of GDP. You can see from this statement that he is not even sure . How can he say that debt total debt is around 32.7 %? It is my biggest bet that threshold has already been breached.

    • Chikwanda is lying. There are also billions of dollars on VAT refunds owed to the mines ($300m to Mopani alone), unpaid amounts to Road and buildings contractors and food suppliers, ZRL salaries and UNZA funding. Govt is broke. Chikwanda should not be playing with numbers to confuse the situation.


  7. but ka Lungu che, he’s bringing this dinosaur Chikwanda from the Kaunda era. Doesn’t he know that the entire Kaunda era was an economic disaster?

  8. Even if your debt is below the internationally accepted threshold, you cannot just go on and on borrowing and borrowing!!! You should be able to find means of raising revenue. The biggest problem is that no one in PF is thinking. They are all Tins when it comes to running the country’s economy. This is the reality they cannot accept. They know absolutely nothing, that is why they are borrowing in order to pay civil servants’ salaries and buy Vehicles. No clue as to how they will pay back!

  9. Please don’t just tell us where we are. It does not mean anything. For peace of mind we want to know the TREND. Is the debt trending upward or downward? If it is going/trending upward we are heading for trouble.

  10. So in other words the PF intends to use all our available debt to GDP. Which will lead to higher interest rates. Further reducing the available capital to businesses. Which will lead to lower internal investment. To attract foriegn investment we will have to lower taxes meaning government collects less revenue and voulor we default on our debt then the situation really gets interesting. In Short WE ARE IN A CATCH 22. With the crazy deficit Chikwanda and LUNGU have no choice but to borrow more else all economic activity will freeze. THANK YOU PF. CLEAR CASE OF HOW “FAILING TO PLAN IS PLANNING TO FAIL”

  11. Bwana Chikwanda you don’t borrow just bcoz you have a gap.You only borrow when you have a workable idea and a promising investment return.

    Lakini hizi ng’ombe za PF wanakopa keweka kwacha nane kwa kichwa cha kwacha mbili.

  12. Truly laughable this old man; Fossil Chikwanda is still overseeing our finances…its say a lot about the caliber of leadership…surely what can this dinosaur bring to the table, to top it off this man is an appointed minister!!

    • That is the biggest problem that is there and will make pf win again. Most people would rather vote for Lungu with all his weaknesses that HH with whatever strengths he may have. They fear HH will just take development to where he is getting 100% votes, Ing’ombe Ilede

    • Chikwanda is lying. There are also billions of dollars on VAT refunds owed to the mines ($300m to Mopani alone), unpaid amounts to Road and buildings contractors and food suppliers, ZRL salaries and UNZA funding. Govt is broke. Chikwanda should not be playing with numbers to confuse the situation.

  13. Imwe bantu simple arithmetic and simple grammar would tell us that: 32.7 percent is not FAR BELOW 40 percent. As far as I’m concerned FAR BELOW would be 2 percent or perhaps any single digit. Does Chick one dar want to invent his own arithmetic?

    • If you add further 25 billion Kwacha to 32.7% you are damn close to 40% of GDP. Or, remove 35 billion from last year GDP and you will get negative growth instead of 6-7% increment.

  14. And yet there are still people out there who demonise RB who somehow was able to lower the price of mealie meal, build infrastructure around the country whilst building $3 billion in reserves as the most corrupt President. If the stories that are being peddled ad nauseam regarding the influence of RB on the current Lungu administration are true, then maybe we might just see an improvement in the Zambian economy.

  15. This is a case of a chap who got a D on an exam and he is bragging because there is yet another chap who got an F.

  16. This Corrupt wheelbarrow who only collects borrowed money from others, is now suggesting a “Stinking Fund” as he knows it will leave him & his family richer, while Zambian’s & toil to repay a Rotten Debt.
    Please fire this clown Chikwanda, before he ruins Zambia further. He’s only fit for a Circus job!!

  17. Mwapya ..you voted for them. Good job. PF please borrow and keep on borrowing. Muchenjele for not using your brains when voting. Borrow and borrow and keep borrowing and borrow and borrow more until borrowing chokes all of you.

  18. Imwe bangwele, ask for accountability! Where is the money going – is it commensurate with what we are seeing on the ground? Making a lot of noise about too much borrowing when our total debt is below 40% GDP is not a strong argument. The most powerful country on this planet is heavily indebted. Credit worthiness is based on your ability to service your debts efficiently. Are we able to do this? Those are the questions you should be asking. The country borrows money for roads, for example – there is too much stealing, the rest goes to Chinese contractors who give us roads that develop potholes even before they are complete. We borrowed for ZR, we borrowed for KKIA, we borrowed for Nkumbula, look at Simon Mwansa Kapwepwe IA – either the pace is too slow or nothing is happening……………

  19. Mr. Chikwanda, can you put in your senile brain that there are other “financial instruments” beyond continuous borrowing which can and must be used to kick-start economic growth which is ESSENTIAL job creator.
    The past four years of your senile 1mbecility have brought economical development to its knees and job creation to distant dream,

  20. Finance Minister Alexander Chikwanda told parliament that the total public debt is around 32.7 percent GDP.

    Mr Chikwanda said the country’s debt position is far below the internationally accepted threshold of 40 percent.


  21. Frankly, that is an incompetent position to take. The international threshold represents a limit that signifies extreme borrowing. It is not a secret that this borrowing is the reason the exchange rate has spiraled out of control. It is no secret that generally, the cost of living has gone up.
    Look, the investments that the PF has made in roads is a little cosmetic in a way that some roads constructed are not for industrial use meaning there will be no return on investment.
    If the half the amount of funds borrowed were used for fostering small businesses, unemployment would have been curbed in 5 years.

  22. Is it not a contradiction that Chikwanda said Zambia will have problems repaying the already contracted loans and yet he says Zambia can still borrow?

  23. The minister of finance expired during KK time. Why should we have such people in office? The economics of the 1900s is long gone we are in the 2000s.

    • @ Mwiinga
      Unfortunately no one noticed that he had expired beacuse the ”use before” tag got faded and fail off due to massive recycling!


    This is some dull Minister of Finance, he thinks everyone is a fool. Total Government debt is at US$12 BILLION, within the last decade we have managed to go from having our debt nearly totally wiped off to back again chocking from it…..

    One wonders what we did as a country to deserve this hopeless government… We are not that ignorant to retain this bunch of thieves.

  25. The 4.2 billion dollar foreign debt is also accruing interest. We are at 37.2 from the 40% threshold. Is it not common sense that without even further borrowing accrued interest alone will push the debt above the 40% threshold after some years? Further the failure by government to explain how money from the foreign bonds was used would suggest that it was misused for non investment purposes. If this is the case then repayment will be a problem as they have to find money from another source but which source? Simply put Chikwanda is a failed finance minister and must be replaced immediately.

  26. more money into useless PF MPs and all it’s cadre pockets (chikwanda included). Chikwanda has been the most use-less Finance minister Zambia has ever had. i call all opposition MPs , NGOs and other Zambians to reject and decampaign visionless and wasteful PF

  27. Is this the same Alexander Chikwanda who served under UNIP? I would be very surprised if we are talking the same person.

  28. So incase of borrowing he is simply saying tiyenayo untill it reach
    or surpass the intn’l accepted threshold.My foot !can you for once feel for those school going children.What will Zambia be like in 2020 to 2030?

  29. Now every Zambian is a finance minister , there is no country in the world which doesn’t borrow, even you personally you have borrowed, now America is the greatest borrower . With out borrowing there could be no meaningful development in any nation ,tell me of a business man who has not borrowed for his business ventures ! If you cant borrow you then forget about development .

    • Nonsense! You borrow for good reasons understanding your plan and capacity to pay back. Just because yu come from together does not make it right. Chikwanda is busy dipping in the same money for his children and u will remain suffering with everybody else. Think before u ink.

    • ba Nshilimubemba
      with all due respect I think you’re confused. You are talking about entities that have a track record of being highly productive. Zambia is not one of them.

  30. nshilimubemba

    If you are a blind supporter just shut up. The opinions of most bloggers are making sense.

    Does it make sense just to go and borrow because your debt is below the threshold?

    Nobody is saying that we must not borrow from what most of the bloggers are saying. It is the reasoning of your grand father when he says we should continue borrowing just because our debt is below the threshold. That is the reasoning people are questioning.

    I never wanted to comment but I’m so appalled at your dullness not to see the arguments people are putting up. You are just as dull as your uncle. We are the people going to pay the debts not your foolish uncle Alexander.

  31. Look at the following Benchmarks and see things like the investment style Yields to maturity,the effective duration and percentage change in prices towards that maturity profile Shikulu alifye bwino with regards to the bond economics but risk management must be carefully looked at to ensure the durations are taken care of adjusting the convexity appropriately in that durations

    1.Barclays U.S. Long Corporate Index

    2.Barclays U.S. Long Credit Index

    its understood its a best case scenario finish the funding gap in projects or rank to postponed and roll gradually with that Projected Growth in GDP opportunistically made to move Zambia towards that classifications amongst the…

  32. with extended duration investors principally will be asking for returns to compensate that maturity and fore gore investing primarily in U.S. government bonds and other principally near risk free high quality fixed incomes

    If the revenues where of that quality in the targeted projects, it will be necessary not to pay the reinvestments strategy to the maturity profile as the roll over can effectively fit in the maturity profile with those assumed guaranteered high quality revenues and returns
    Being a Finance Minister in Zambia is a good job but real options quiet slim given low diversified revenues and revenue streams

    A private Public implementation mix in chingola Rds and other may now…

  33. help to ensure continuation in concessioning and operational effective as apposed to GRZ Capital then Opex spending A mix in financing will help create the match need fiscal space taking upfront those concessional revenues and making them available to much needed much carefully with the repayment in those loans obtained

  34. The sinking fund provision is okay but it has to be managed to a particular strategy with those INDEXES in mind to ensure the “”cross rates “”” are positive at the time of redemption or repayment of the coupons ds and principal

    The profile and strategy must be matched to the maturity profile of those fixed incomes and invested to a particular strategy and the Barclays Barclays U.S. Long Corporate Index and Barclays U.S. Long Credit Index in a floater type

    It can be done and all other combinations to ensure best case scenario in the mix of options in funding methods and operational effectiveness to gain on revenue streams

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