Finance Minister Alexander Chikwanda has disowned a statement issued by an officer in the ministry of Finance disputing Moody’s Rating Agency’s assessment that Zambia’s credit rating had deteriorated.
Mr Chikwanda, who said that he will not serve beyond 2016 owing to age, said that his ministry is embarrassed by the statement issued by the officer disputing Moody’s assessment.
Mr Chikwanda has told Parliament that it is a pity that an overzealous officer commented on Moody’s assessment of Zambia to the embarrassment of the ministry.
Mr Chikwanda said that the ministry of Finance has no intention of getting into a quarrel with a rating agency, but would simply provide correct information about the economy.
Mr Chikwanda noted that Moody’s is a very respectable rating agency and that when provided with correct information they can adjust their rating of the economy.
Mr Chikwanda stated that while the country’s economy is facing challenges, it is not on the brink of collapse.
Mr Chikwanda said that the issuing of conflicting statements by government officials on the economy is not helping, saying that policy consistency and predictability is very important for any economy.
And Mr Chikwanda has said that the tumbling of the kwacha has been largely as a result of the chaos in the mining sector that has seen copper prices tumble on the international market.
He said the government will not interfere in the money market but asked that members of the business community be reasonable and not pursue policies that could hurt the financial market.
“We will maintain a free flowing exchange rate but call on the business community to be supportive of our actions as all of us will be affected,” Chikwanda.
He told parliament that the fall of the copper prices from $ 7, 000 metric tonnes per dollar to below 5,000 metric tonnes per dollar from $7 000 to $ 5,000 per metric ton had shaken up the financial market as the mines contributed 70% of foreign
exchange.
Chikwanda refuted credibly held views that the kwacha had been the worst performing currency as cited by credit rating agencies.
“Do not take everything that a misdirected reporter at Bloomberg writes, so do not take it as hook line and sinker. Do not pontificate everything that the news agencies give you but we believe if we give them correct information they will adjust,” he said.
The PR department of the Finance Ministry is moribund and must be disbanded. The head of that department sounds like a UNIP disciple or a Cold War adherent who only knows about window-dressing facts and peppering the truth with jingoistic chants. Could it be possible the PR will also NOT go beyond December, 2015?
Very embarrassing statement Kandeta made. What he didn’t understand was that all Moody’s did was to realign their rating to the same level as Fitch and S&P. He is probably spending a lot of time with Amos Chanda and Hon. Chibwili Kashimba.
If ever we had a president with a vision in State House which we don’t, the best thing to do is to relieve the Fossil Chikwanda now and appoint a young Finance Minister who can plan for the future; there is simply no way this man can plan for the future in these times hence the borrowing at high rates for the short term as he wont be there whether he resigns or not!!
There’s no way an officer could have said such a statement without the ministry’s knowledge. Govt is very disappointing because these guys are shooting in the dark hoping something will stick or hit the mark. Sad my fellow Zambians that we can tolerate such leadership.
What do you expect when these Positions are given to cadres? They Know nothing and issues stupid statements like Kambwili. That’s what PF is made of. Dull and useless people.
Shame..shame shame….That’s the result of poor leadership and naive Financial and budget leaders in our country. You guys in working like the devils advocates destroying our country and the indebting the future. And then President Lungu is just sitting and watching all this? Even travelling the every so often without caring for the economy??? …
Retiring i thought it would happen next week but at not beyond 2016.will pf be in power beyond 2016?my guess not.
He told parliament that the fall of the copper prices from 7, 000 metric tonnes per dollar to below 5,000 metric tonnes per dollar : LT what kind of reporting/pricing is this? metric tonnes per dollar! It dollars per metric tonne NOT the other way round
Yaba! Even the reporting is gone astray! Problems
At least he has the two senses needed to recognize when it’s time to pack-up and go back to the village. Give some kudos to this KK dinosaur.
Ba mudala ba Chikwanda should never have accepted this position in the first place. Look at where he has landed the country!! No kudos for this KK dinosaur.
Retiring in 2016? This is laughable ….simply step now as shown by the appalling leadership in that ministry where a mere spokesman can make unofficial remarks about a Ratings agency. Step aside as you are doing the selfsame thing as the junior officer by discrediting Boomberg instead of countering with tangible solutions.
even tomorrow ba mudala…its about damn time! way past due…
Chikwanda is very sensible….. better than HH
KWACHA APPRECIATES
I know good news is usually not good news. Excellent news is even shunned.
I am excited that this was one of our prayer points.
Yes the Kwacha is on the rise and appreciating so rapidly.
It was K14 on Tuesday close of business and now it has appreciated so significantly and is now K11.4 per US $ as at 11hrs.
Currencies like the South African Rand, Kenyan Shillings and other currencies have suffered depreciation because of a China factor ,commodity factors and USA $ global appreciation of it’s currency but the depreciation has only been to extents of 15-29%.
But for us, the depreciation was running to almost 100%.
Our scenario is more attributable to speculation than the stated international factors…..
hahahAHA,,, REALLY??,,,, Your loadsheding currency,, up and down!! and you are proud???
You really are a joke! Even your name “katondo boys” is a joke! Try katondo babies or katondo imbeciles which would be much more appropriate and factual.
You have no idea about what you are talking about. Clueless clown!
brother boys,
I don’t what time zone you are in but as of 3 minutes ago the exchange rate was 1.00 USD = 12.3600 ZMW. In other words, if you have 1 Zambian kwacha you only get 0.0809062 of a US dollar. That’s less than 1 cent ka.
Actually brother boys, I lied. I butchered my math. 1 Zambian kwacha will get you about 8¢ or there abouts.
@ katondo boys
What appreciation of kwacha you are talking about?
Where are you getting your figures? From your snail sized brain or extra large hole between your legs which is used and abused by the rest of the “katondo boys”?
THIS IS CURRENT SITUATION (Source BoZ):
02 October 2015 15:30 12.3159 12.3359
02 October 2015 12:30 12.0868 12.1068
02 October 2015 09:30 11.7774 11.7974
In a SINGLE day, 2nd October 2015, kwacha depreciated 4.3653%
I will be tankful if you keep your 1mbecility to yourself.
There is nothing wrong in PR of Finance to dispute the ratings given the basis and reasonableness especially if its ISSUER based may be its the conning of the statement RATINGS are just opinions of AGENCIES and those opinions are not cast in the stone There are options like CREDIT DEFAULT swaps on those impaired Statistics especially on the BONDS Its not a foregone conclusion
It will also be helpful the ””RISK”” evaluation strategy for moody and see the intentions of the ratings
There is nothing wrong to request for REASONABLENESS and align with yours as reported Its not only a case of Zambia elsewhere ratings have been confirmed…
Bwana Chikwanda how can Zambia ever have a top notch economy when the ship captain is clueless and his junior officers are dropping the anchor in the wrong port ?
I read the title and started dancing. Thought he was retiring this week. Then I read the article.
If ABC had announced his immediate resignation, the markets would have cheered and gained confidence.
Trust me, there is absolutely NO way Kandeta would have issued a Governement Statement without APPROVAL. I know how being a mouth piece works ….. you are only a puppet who utters and acts what the puppeteer says/does.
My bro Chileshe, this comes with the territory. PR heads take the blows when the deal falls through….lol. Fret not! I had my share of such ‘betrayals’ by CEO/Boards when I was doing PR…..folks might not agree but it is true!!
It’s not a foregone conclusion though we know that For instance the debt category in corporates and sovereign is under severe pressure and the debt to GDP ratios are likely to even escalate based on the cost of capital and losses for those in EURO BONDS or DOLLAR BONDS for EM given the imminent rates rise and risks associated with that
If you analyse Brazil to see and relate to similar characteristics in Zambia’s, Brazil is very venerable to higher interests and durations on its debt having acquired debt exponentially in the past 5 yrs. For infrastructural based on booming commodities. The combination of massive foreign debt and currency collapse is…
interesting to analyse understand and see lessons in Brazil The Brazilian currency has lost almost 50% of its value since over the 5 yr.
The low foreign currency dynamics driven by slump in commodities prices coupled with high debt levels have impaired most asset classes in emerging markets and Zambia is not an exception As a result capital outflows or restrictions both for resident and non-resident investors has been indicated and observed as investors become more risk averse consequently heavily contributing to the slow in growth of the most industries
In view of this it is important to relate the solutions to the kwacha One Good solution for the Kwacha…
for the Kwacha apart from the well observed by Honourable Mutati is the AWARD of Contracts for future Infra in kwacha and agree escalation clause pared to FX
It is also important to allow further all products in spot , forwards, futures , swaps and options open to foreign institutional trading therefore narrowing the spread between the onshore and offshore trades to gravitate the kwacha and make it more resilient allowing all FOREIGN sovereign funds and Banks trade only with Bank of Zambia or use one appointed agent to trade directly with BOZ only on the Interbank
It requires market support and reengineering as opposed to one single directions you will see the immediate effect on…
Naimwee ba Johnston muhango stop trying to dupe us with big words or are you trying to show off, ati ” institutionalised offshore and inshore trades via interbank escalation clause par FX ” , not every one is an economics student get real man.
Come 2016 and Zambia will have another downgrade…the voters will downgrade this bumbling and clueless govt.
It is very unlikely that Chileshe Kandeta made the statement without approval. He is being used as a scapegoat for political expediency. I just hope he will not be unfairly treated like Felix Nkulukusa! If this all the Minister of Finance said, he still has homework to do. There is nothing new in what he has said. How can Parliament accept such a Statement?
Its though correct that credit spreads in global markets have detoriated on sovereigns and corporates but nothing wrong in confirmation and questioning Its not a Jacket or forgone conclusion or fear of UNFAVOURABLE hostile downgrades
There are documented instances of RATINGS down grade that have gone there other side and reforms have been called in this SECTOR to the improvement of metrics
Jonathan the analyst, can you please simplify your comments, so that even us lay member, can understand what you mean. This is important so that we can learn and give a fair opinion, not like a cadre who will always support anything thing which comes out. We want to look at issues like the proposed ZESCO tariffs, @@ they want to attract foreign investment, surely this hike has come at a wrong time, when tempers are rising, that’s when there is a proposal to hike tariffs. People have suggested that why can’t ZESCO raise capital @ the Lusaka stock exchange.?
He cannot. When you use “copy” and “paste”, there is no translation available.
@Facts copy and paste and you dont know where the edit button is! Now that is plagiarism at its best!
It is absolute shame, that it took our senile Minister of Finance more than a week to even mention Moody’s. Mind you,, did he actually clarify anything?
And his “Humble” and “Visionary” Boss is still enjoying his “hard earned” holidays from the “stress” of being on holidays.
I am surprised that Moody’s did not value Zambian Bonds at Zzz-
A lot of countries follow the USA which keeps finance bosses for ages like Alan greenspan who was incharge for decades in the US. Chikwanda brought much needed experience to the ministry. You can’t blame him for the current crisis he was not incharge of diversification of the economy, it is the usless ministers and MP s that we have in GRZ who are not accountable for anything. You have the most usless ministers and MP s who only know how to steal. That is why anyone visiting GRZ offices only finds jackets, the officials are all out on private errands , nothing gets done. It was Chikwanda who alluded to the damage to the economy the over inflated road building costs were doing. Over inflated by the same usless ministers and MP s.
You can confirm the ratings and work for LONGSTERN unwind Any one with Fundamental Analysis of Monetary and fiscal position of Zambia’s will know even without being Reminded and Align to ensure when RATED you are AGREE
You will not have a currency depreciate 20% within a period and never get a review for you to retain investments grade status you will need to ensure that you consolidate on the medium term budget and track to reduce the persistence deficits and shall some fiscal prudence Such gloomy power shortages affecting industries also translating in the Kwacha are issues
You will need to show long-term fiscal consolidation to easily gain the points…
to Investments grade and avoid the JUNK status avoiding also slump in growth that translates in revenue losses further giving pressure on the down side risks of further borrowing
Its not therefore wrong to confirm the ratings with your positions having understood the purpose and reasons behind the ratings Its only an outlook and opinion not the Nail on the Coffin as in burial but also some thing good to take charge
There are real opinions for Zambia very Good prospects moving on from the this RATINGS Down Grade
Fiscal prudence not with standing world financial constraints with linkage to exhaustive financial database analysis can and must push benchmark objectives to benchmark break even points without breaching negativities. Even if those linkages are not exhaustive it remains the objectivity of market forces following the pull and push paradox for which our technocrats remain astute.
This of course is all sold as bearings to laws of financial relativity and reality within the bounds of abjectivity.
Out of Professional reasons I try to avoid to comment on Zesco being a former employee I know the pitfalls in Zesco financing structure in comparison to other
One of the reason why Zesco is not attractive for Investments in energy is because of those low tariffs and the other is that Its far from having an investor relationship type of positioning There are not been taken into public like Eskom whose nuclear Financing is rated in bonds and is a source of worry in the DOWN GRADE in SA
Unlike CEC which is reported and followed Zesco is far from being taken Public The CAP at Luse is not activate to offer that liquidity necessary to even raise a USD2 for Kafue…
for Kafue Lower You will need other methods of financing like crowd funding PPP BOOT BOT etc.
I try as much as possible to comment directly on Zesco I am also amazed at some one who consistently give me negative scores I simply smile and laugh at it He does not understand and its usually a PHD syndrome here O enjoy it though Observe the NEGATIVES POINTS
If you want to see the FINANCIAL EXPOSURE of CEC check AFRICAN FINANCIALS and see why CEC is preferred Financial for Hydro and Transmission projects Avoiding the FISCAS strain we are experiencing It can be avoided in CEC SPV
I end here //
I try to refrain okay unless professional meetings and conversation and only when I have researched checked and read
I will not comment further and let others The tariff propose is there in the news to check and reconfirm and Financials are available to simulate including the Energy African Utilities Financials and Business Plans Check and see why others slightly are flexible than Zesco In attracting Financing in equities and fixed incomes
Good man but nice his leaving office
Alexander chikwanda is a wise old man, it is the other monkeys in cabinet that are a letdown. The crisis we are seeing boils down to no accountability in GRZ. Even if you are not doing your job, every one around you is a looter and won’t question you. Infact mediocracy and willfull dereliction of duty is the wayfoward in GRZ.
I really don’t know why Chikwanda is alluding to the China as being the only factor for the poorly performing Kwacha. How about the load shedding and its effect on production. Surely that has contributed. The Zambian govt is on automatic pilot that is why officials are making statements without thinking about the consequences. Kambwili as usual opens his gob yet he doesn’t even have a clue about economics. He thinks he is an expert in all fields. Yet the sad thing is that he is not corrected by anyone in government. Are other officials scared of him? Why can’t Lungu warn him? It s unbelievable but that a nation is being misled by the same people who are supposed to be leading it.
A currency is an indicator or barometer of the healthy of the economy Normally a well diversified robust economy will have the AGGREGATES summed in the currency Performance
As a mark of accomplishment address the GOLD STANDARD in the Kwacha implies addressing the fundaments in the Economy the Honourable ABC in that Case is correct though laying the foundation is important before taking about the Metrics and also to mention about what the real options are for Z
I KNOW THAT WE ALL NEED MONEY IRRESPECTIVE OF AGE, BUT SOMETIMES INSTINCT SHOULD TELL YOU TO DO THE RIGHT THING, AND IN THIS CASE CHIKWANDA’S RIGHT INSTINCT SHOULD HAVE LONG COMMUNICATED TO HIM TO STEP DOWN FROM BEING MINISTER OF FINANCE. CHIKWANDA’S BRAIN IS TIRED, HE CAN’T ARTICULATE NATIONAL FINANCIAL MATTERS ANYMORE! PLEASE LUNGU GIVE CHKWANDA A BREAK, JUST LIKE ZAMBIANS SHOULD GIVE YOU LUNGU AN IMMEDIATE BREAK TOO. YOU LUNGU AND YOUR CORRUPT TEAM HAVE MESSED UP OUR COUNTRY BIG TIME. YOU ARE THE MOST USELESS PRESIDENT ZAMBIA HAS EVER HAD. YOU NEED TO BE KICKED OUT OF STATE HOUSE IMMEDIATELY. ANY ZAMBIAN WHO VOTED FOR YOU WAS WRONG. YOU ARE NOT FIT TO BE PRESIDENT OF A COUNTRY.