Thursday, June 13, 2024

Zambia’s hidden debt crisis Part 2 : Alternative calculations put debt at $23.4 billion (and counting)


Finance Minister Felix Mutati (L)
Finance Minister Felix Mutati (L)

On 28th July 2017, we released the preliminary findings of our research into what the true debt position of Zambia is. We have received lots of useful feedback after many Zambians interrogated the figures we presented. As we stated in our original writeup, we did not claim perfection and we acknowledged that there could be gaps in our findings, factors we overlooked or information we left out. This second article aims to address these points.

We have uncovered more loans than we listed previously. However, rather than list all the loans as we did before, we decided to take a different approach. We have taken the total of all new loans by year from the Annual Reports on the Ministry of Finance (MOF) website. We have then listed and totaled up the loans for 2017 (thus far) and added to the MOF figures. The amounts from MOF include the $3 billion of Eurobonds which we had erroneously left out of our earlier analysis.

Due to the change of government in 2011, we have left out any new loans contracted in that year because the Patriotic Front (PF) government only ruled for the last 3 months of the year and in any case, new loans in 2011 only amounted to $504.8 million, half of which was for the Mongu-Kalabo Road as per MOF report. We took the final external debt figure for 2011 as at 31st December 2011 and added it to the new loans thereafter. The 2011 external debt, as reported by the IMF 2015 Debt Sustainability report for Zambia, was $3.5 billion (15% of $23.5 billion GDP in 2011).

2012: $1.31 billion
2013: $1.25 billion
2014: $1.58 billion
2015: $2.21 billion
2016: $3.46 billion
2017: $4.20 billion (estimated; breakdown further below)
2011: $3.50 billion (cumulative external debt stock from previous government)
EXTERNAL DEBT TOTAL: $17.5 billion (2017)


MOF Annual Reports show total debt servicing of the principal amount at only $688 million between 2012 and 2016, with $748 million in interest payments (see below). MOF reports show $9.8 billion in new additional loans between 2012 and 2016 (see above), but show the debt stock in 2016 at only $6.9 billion (up from their own questionable figure of $2.0 billion in 2011), meaning that external debt increased by only $4.9 billion. This seems very suspicious because $2.0 billion plus $9.8 billion of new debts less $0.688 billion in debt servicing should produce $11.1 billion at year end 2016. There is a massive $4.2 billion discrepancy between $11.1 billion and $6.9 billion that needs explaining by the Finance Minister, not to mention that their external debt figure of $2.0 billion in 2011 is different from the IMF/World bank figure of $3.5 billion.

2012 | $228.9m | $67.7m | $296.6m
2013 | $97.7m | $63.1m | $160.8m
2014 | $55.3m | $130.0m | $185.3m
2015 | $136.8m | $172.6m | $309.3m
2016 | $169.0m | $315.0m | $484.0m
2017 | $200.0m* | $400.0m* | $600.0m* (*estimated)

SUM | $887.7m | $1,148.3m | $2,036.0m

NET EXTERNAL DEBT 2017: $16.6 billion

($17.5 billion less $0.888 billion principal amount debt servicing)


The Finance Minister stated in Parliament that the domestic debt stock stood at K38.6 billion and domestic arrears were K17.4 billion. Adding these two figures produces K56.0 billion. The exchange rate in May 2017 was K9.30 per Dollar. Therefore, the K56.0 billion local debt based on government securities plus arrears as of May 2017 is at least $6.0 billion. In December 2016, Mr Mutati revealed that K8.7 billion was owed to local contractors which is $840 million using the exchange rate at the time (K10.36/$1.00).

LOCAL DEBTS TOTAL: $6.84 billion

NET DEBT GRAND TOTAL: $23.4 billion ($16.6 billion + $6.8 billion)


Our earlier article did not mention interest on the loans because we wanted to simplify things and deal with the interest in a follow up article. Debt repayments are estimated at $2.0 billion from 2012 to 2017 of which $1.15 billion (57.5%) is interest. Many of the loans are provided by China and are long term (15-20 years) with interest rates as low as 3% (eg China Exim Bank). World Bank loans are among the cheapest at 0.5% and also long term. The Eurobond loans are in the region of 5%-10% while other loans are interest free.

It is a huge challenge to estimate the total interest to be paid on the net external debt of $16.6 billion, especially since the interest rates vary so much from loan to loan. Data on the rates for each of the loans is difficult to find. A very conservative interest rate of 3% per annum over 10 years adds $2.6 billion in interest, 15 years adds $4.0 billion and 20 years $5.5 billion. This assumes all payments are made on time. Delays in repayments attract penalties which can quickly balloon the debt considerably. Matters are further complicated by contracting new loans in future, refinancing, and debt write-offs. What is certainly clear is that interest will add billions to the $23.4 billion net debt.


We have endeavoured to cite from a wide variety of sources (see list below). This has included official sources like Ministry of Finance, state media and other reputable sources such as Reuters and World Bank. We hope to remove any accusations of bias and questions on reliability of information.


It did occur to us that there may be secret loans potentially running into hundreds of millions of Dollars for the defence forces and intelligence services. We shall not speculate on these.


Some have made the argument that the loans will spur economic growth and therefore going to make repayments easier and faster. This is certainly partly true, especially loans meant for business and key infrastructure like roads and railways. However, many loans are used for political and not economic reasons. For example, roads are often built in areas where the economic activity cannot justify them. They never pay for themselves and are subsidized from taxes.

Calculating whether the positive effects of the loans will lead to pay back in good time is not easy. Some of them are for things like health, sanitation and environmental matters which do not directly generate revenue. We believe that the Zambian government has gotten too many loans too quickly which shall lead to another debt crisis further down the road. We shall discuss this in more detail in due course.


Others say that the government in its tabulation of the $7.2 billion figure uses actual disbursements received for the external debt stock figure. Such a method of computing the debt is not only disingenuous, it still does not change the total amount signed for, and for which interest has to be paid. After you sign for a loan, it becomes a liability, unless the lender fails to remit funds. In any case, loan disbursements are normally given fairly quickly within the same year of signing the agreements so that the lender begins earning interest. It is not in the interest of lenders to delay disbursements.


The following is the list of the major loans obtained in 2017 that make up the $4.2 billion figure above. These are the ones we were able to trace.

1. Lusaka de-congestion: $286 million
2. Communication towers: $280 million
3. Chipata-Serenje railway line: $2.3 billion
4. 2,000 Military Houses: $157 million
5. International Development Assistance programme: $600 million
6. Rural roads project (World Bank): $200 million
7. Digital migration: $273 million
8. Fish industry: $50 million
9. Rural energy (World Bank): $26.5 million
10. Legume-based farming: $30 million

2017 LOANS TOTAL: $4.2 billion


316km Lusaka-Ndola Dual carriageway: $500 million
70km Ndola-Mufulira road: $80 million
Miscellaneous infrastructure development projects: $8 billion (already applied for)

POTENTIAL FINAL NET DEBT: $31.9 billion in 2017 ($23.4 billion + $8.5 billion)


We are grateful that some people correctly pointed out to us that the Kwacha was rebased in January 2013. Two of the figures we quoted in our earlier writeup for the period 2011 to 2012 were converted from the Kwacha equivalent into US Dollars. These were the poverty reduction loans that were K65.5 billion and K32 billion. We reported the US Dollar equivalent as $13.5 billion and $6.7 billion. We have found that the US Dollar equivalent of the two figures were incorrect because the Kwacha amounts were in the old currency which was 1,000 times greater than the rebased Kwacha. The correct amounts are $13.2 million and $6.7 million at the exchange rate of K4,850 and K4,770 per US Dollar respectively.

By Nevers Sekwila Mumba

1. Mofnp
2. Daily mail
3. Daily mail
4. CNBC Africa
5. Daily mail
6. Daily Mail
7. Reuters
8. World bank
9. Daily Mail
10. Mofnp
11. Daily Mail
12. Lusakatimes
13. Lusakatimes
14. Southern African news
15. World Bank
16. Lusakatimes
17. IMF
18. Lusakatimes
19. Daily Mail
20. Daily mail


  1. You’re gonna hear the talking heads and folks scared of simple arithmetic screaming. The figures are here for all to count and add. Let’s hear you ardent supporters of this mess; please spare us the insults and your emotions for once!

    • Ba Sekwila, please add also the amount you borrowed as High Commissioner to Canada which I believe was used in your personal capacity.

      All in all good job and I look forward to the next part of the analysis …

    • This debt is working to develop mother Zambia. Ba Sekwila stole over US$250 million to develop solely his own pocket. So, which better??? Please will you shut your loud mounth, Dr Sekwila???

    • The TRUTH is, this debt is nothing to be be pulling our heads for.

      Nigeria, Zimbabwe, South AFriica , Malawi even egypt have debts to GDP more than Zambia.

      This is a false alarm and I see no reason for us to be click the panic button.

      The truth is, Zambia is fine, we have Malls, roads are being built left right and centre, Universities are being opened, education is on the up.

      What else do you want?

      WHat do you want, answer me!



    • You are right Warlord. Too many dumb 1di0ts in this country. Just look at the useless comments below talking abut Canada and personal debts and all manner of nonsese. Muli fipuba mwebena Zambia.

    • HERE is the list of countries whose Debt to GDP are worse the Zambia and are just fine and comparatively WORSE than zambia, but they do not complain: In descending order

      Cape verde

      Any ignoramus suggesting this is as a result of Lungu, or being mismanaged is obtuse quiet literally.

      The country is FINE – I promise you have a PhD



    • You were wrong once, why are you right now? What will stop you from saying that you are wrong again? Debt is better than aid. A real man borrows a lazy man begs. If Zambia is borrowing in order to grow the economy, is that not a good thing Nevers? Do you know how your under-5 classmate became rich? If he did not borrow, he begged or stole.

    • A lot of monies borrowed but yet too little development. The big question now is to find out where most of the money has gone and immediately, address the thieving scourge if that’s the case.

      Thank you ba Nevers and everybody who contributed to these findings.

      Good bless Zambia.

    • According to the CIA Brazil has a debt to GDP ratio of 89.4%, UK 92.2%, France 96.5%, Canada 98.8%, Mozambique 100.3%, Belgium 106.7%, Singapore 110.5%, Portugal 126.2%, and Japan the mother of Toyota and Mitsubishi has a debt to GDP ratio of 234.7%.
      So why the noise? What is important is what the money is being used for.

    • @Kalampa
      Emukwai tuli fipuba fwebena Zambia but fisanga abaume mwaiche elo teti tuleke kachema wenu atuteke, pabwato fye!

    • Am disappointed with Never Mumba. Newspapers are never a credible source of information. Ask any lecturer if at all newspapers can cited during research. Am disappointed with Nevers Mumba.

    • Iwe ka Mushota stop being dull. Can you compare Zambia’s economy with that of Japan or Italy? You chaps pa Zed can’t even make toothpicks but you want to compare yourselves with rich industrialized countries that have widely diversified economies built over 150 years. Greece for your information collapsed because of too much debt but somehow you think we should emulate them. Ubukopo bweka bweka!

    • Zambia’s real debt is more than the goverment is tell you. In 2011 when the Patriotic Front (PF) government took office, Zambia’s external debt stood at $3.5 billion (15% of GDP).
      The government’s own figure is $7.2 billion (34% of an estimated $21 billion GDP) in 2017 and the year is not yet over. But the World Bank as of 2015 put the debt at $8.7 billion (by 2017 it is certainly around $10 billion). $33 billion, it is 157% of GDP. 40% is the government’s own acceptable threshold. Local debt ($4 billion) arrears owed to contractors ($1.7 billion). An estimate of that the grand total of all debts is anything from $35 billion to $40 billion.

  2. Ba Mumba, what is the motivation behind this reporting? You have not told us the real purpose of your “research!

    • @Big Joe
      Dr. Mumba is highlighting the true debt we hold as a people so that we take stock of the way things are going. In my home we have agreed that what we need we already have; what we don’t need as of this day, we don’t have and we shall not brow to have it. The one to whom you are indebted owns you and literally hold your balls and directs your world view. If you were adult enough in 1986-1987, you will recall what happened in Zambia leading up the stranglehold of the structural adjustment programs of the 1990s. It started with unbridled debt acquisition and this is where it’s gonna end up!

    • The real purpose is that your finance minister report a debt of 17.2 Billion USD, the coreeected that amount to 7.2 Billion USD. Surely that is good enough reason to look into this mess and come up with the true figure owing. Do you get now, you dimwit? Problem in Zambia is that everything is looked at through tribal or political lenses.

    • Dummy! Do you need an explanation about leaving beyond our means?
      He’s saying to you, we are in Sh!t and that sh!t is about to hit the fan. Wake up!

  3. But why is the article not properly referenced? Stating the sources of your information at the bottom of your article is not the way to reference an article. How is one suppose to verify your claims?

  4. I have rarely seen such dullness in a man who was part of the debt when serving as ambassador in Canada. Just how does a man expose his own debts and cash that he stole. This man is part of the debt that he is talking about. Stoke taking is good but the one that is done in bad faith like what this mumba thing is talking about is just a pain in the backside.

  5. This nonsense from Nevers must stop and what is the motivation of publishing wrong data to the public? We have highly qualified people at MOF to provide any information that the public may need and not this half baked information.

  6. This is the reason why Honorary PHDs must be discouraged. What I know, from my schooling, is that Newspaper articles cannot be referenced as a source documents.

    • Well as the English say the truth is in the pudding…. why have the so called highly qualified people at MOF not disputed these figures?

      Soon you will realize that your asse.s have been sold to China

    • Actually, reliable newspapers like the Times of Zambia and the Zambia Daily Mail can be referenced as source documents.

    • @7 Yangu, where did you do your PhD? When doing research into politics or sentiment analysis, newspapers are a great source of data. The problem is that people just speak for the sake of it. Yangu, do you know how difficult it is get objective, public data in Zambia? The government seems to want to hide everything! We are governed in a way that celebrates citizen ignorance of what government is doing. No wonder the high levels of corruption!

  7. Zambia GDP
    The Gross Domestic Product (GDP) in Zambia was worth 19.55 billion US dollars in 2016. The GDP represents the broadest quantitative measure of a nation’s total economic activity in a given time, usually reported yearly. This can be compared to your net salary. When your debt level exceeds your GDP, it means all the money government collects goes towards debt servicing with no money left for anything else. This is a serious crisis Dr Mumba is bringing out and all patriotic citizens should demand to know from the government what the true picture is. This is serious and is not a jocking matter! We can’t go on borrowing like headless chickens!

    • @8 The Economist. Thanks for your clear and concise explanation. Zambians like politicking even when it is not necessary. I applaud the efforts of Dr. Mumba and team to bring this situation into the national discourse. These debts affect all of us. We need some light to be shone on the process of contracting loans and on the process of using the loan proceeds! We need transparency in government!

    • Thanks Angel! And this can explain why the government is always increasing or coming up with way too many funny taxes to make up for the shortfalls in disposable revenue. PAYE may go up to 40 to 45% in 2018. VAT may also go up. The tax burden in Zambia is just too much now and only adds to the already high cost of doing business. Terrible state of affairs! This is a crisis we need to address as a matter of urgency or we are doomed!

  8. I am more interested in the earlier claims you made as follows:
    (i)Poverty reduction projects: $13.5 Billion (2012)
    (ii)Poverty reduction programmes: $6.7 billion (2011). These two loan categories were about 66% of the $30.4bn you were hallucinating about. Which institutions could lend us $13.5bn in 2012 when the entire budget for that same year was $5.54bn? How can a normal person still believe you if you can revise figures from 13.5bn to 1.3bn for 2012?

    • Which institution can lend Zambia $8billion when our budget is $5billion? The government has already applied for it. Making a mistake does not invalidate everything else said. That is bad reasoning.

  9. We need a Debt Due Diligence exercise by an Independent and professional Audit Firm b4 we contract some more debt from IMF. The Debt Sustainability Assessment should be an IMF Board condition precedent to IMF Board Loan Approval. Period.

  10. So from the original analysis the debt has dropped by US $7billion after major corrections. At this rate we can extrapolate that another two corrections at the rate of 7 billion per correction will bring the debt down to the correct figure of US $7billion. Now my analysis should clear the minds of UPNDonkeys. As someone says are you serious with numbers if your source is a newspaper Zambia Daily Mail or even the Post? You have to be a UPNDonkey.

    By the way is underfive preparing for a long trial followed by a long imprisonment now?

  11. ….And then total oblivion from politics. What a pity because underfive has nothing national to remember him for, no Mongu Kalabo, no this no no etc etc.
    Nibalya ati pakubashika nga bafwa kushinkako kulyakwine.

  12. In Zambia everything is looked at in terms of tribe. You id1ots, this country is not owned by thieving PF id1ots. Be objective in your reasoning ba kolwe imwee..

  13. A bitter pastor now wants to mislead people of Zambia posting cooked up figures. So the GRZ is wrong but him and upnd minions are right? Pastor will change nothing but God


    • Newspapers report events and are even used for evidence in court and also in Parliament. the first reference is the Ministry website.

  15. We are just reading and understanding. The right time to pay those loans will come. Ordinary Zambians will suffer. Politicians don’t stop borrowing since they believe its the best way to develop. However, they usually fail to pay back but always ask ordinary Zambians to Sacrifice. Keep giving us the Data. It is important though there is nothing we can do now since we are not in control of things. We hope to see a better government soon.

  16. First drought. Then food riots. Then economy has collapsed. Then the kwacha is history, we will be like Zimbabwe soon. Then rigging. Then petition. Then ammagedon. Then dictatorship. Now we have debts that even exceed our GDP…THESE ARE THE USELESS STRATEGIES OF upnd, a party of 1diots, tribalists, losers, 1mbeciles and brainless clowns!!! THEY NEVER GET IT RIGHT. Remember the truck that was impounded and was suppose to have pre-marked ballots??? Total b.u.f.f.oons!!!!!!!

    • And the Chinese will demand to be recognized as tribe in Zambia the way Indians have done in Kenya ahead of the August 8 elections. Black folks don’t really know how to run no nation!

  17. Matters on debt are serious because they will affect future generations. Mutati doesn’t care, he is living for the moment; to get as many cuts as possible.

  18. PASTOR Compare that with this.
    Today’s Federal Debt is $19,844,938,940,351.37. (20trillion debt excluding local and state debts)

    The amount is the gross outstanding debt issued by the United States Department of the Treasury since 1790 and reported here.

    But, it doesn’t include state and local debt.

    And, it doesn’t include so-called “agency debt.”

    And, it doesn’t include the so-called unfunded liabilities of entitlement programs like Social Security and Medicare.

    Federal Debt per person is about $60,818.

  19. 1. You should apologize and repent for misleading the nation in the first figures you gave. since there are no small sins
    2. Pastor so you want donors to rise against this country

  20. The intention of ‘Mr Nervous Mumba is to make the IMF reject the funding application. it doesn’t matter to this so called Man of God that failure to secure the IMF loan will lead to more suffering for the poorest of the poor.

  21. A doctor who does not know where to find credible,relevant,up todate information. Peer reviewed articles and sources from people with authority who are not bias

    • MOF and BOZ cadres are hiding the true figures! Even students trying to do their research are being denied that data! There must be transparency in the manner government borrows. PFG is too reckless in this aspect and we fear this government has auctioned this country through debt, especially to China. Can we call this government to account for the debt stock now! It’s laughable when you hear some ignoramuses rejoicing over the high Chinese numbers visiting in the name of tourists. The question to ask is where do these tourists stay when they come? Chinese owned hotels in Zambia paying close to nothing to the citizens. Instead of restricting the hospitality industry to citizens, we are busy enriching infestors. They come as tourists, next they buy property then they are landlords in…

    • They come as tourists, next they buy property then they are landlords in Zambia? Incredible! I have stopped singing that national anthem. It no longer makes sense!

    • Wow!!! This is amazing, a whole group of donkeys actually believe this rubbish?? This is sad. So tell us, name the lenders who gave us this debt which the minister “deliberately” omitted?? The IMF confirmed our debt and have always said our debt to GDP ratio is still below crisis level of 50% and you want to lie to the nation that our ratio is now 133%???? Zambia would have been on CNN, BBC etc every morning!!! STOP FEEDING YOUR HEADS WITH RUBBISH AND GET SOME REAL STRATEGIES THAT WORK AND WILL HELP YOUR upnd FAILED PROJECT TO WORK!!!

    • External debt: $9.27 billion (31 December 2016 est.)
      $8.88 billion (31 December 2015 est.)
      Definition: This entry gives the total public and private debt owed to nonresidents repayable in foreign currency, goods, or services. These figures are calculated on an exchange rate basis, i.e., not in purchasing power parity (PPP) terms.
      Source: CIA World Factbook – This page was last updated on July 9, 2017

  22. Job well done Bwana Nevers Mumba we appreciate your research to ensure Zambian kids are not bequeathed some bankrupt nation.

    • He lied Zambia’s External debt: $9.27 billion (31 December 2016 est.)
      $8.88 billion (31 December 2015 est.)
      Definition: This entry gives the total public and private debt owed to nonresidents repayable in foreign currency, goods, or services. These figures are calculated on an exchange rate basis, i.e., not in purchasing power parity (PPP) terms.

      Source: CIA World Factbook – This page was last updated on July 9, 2017

  23. We have self proclaimed economists giving their input and advise without any experience.

    It is a JOKE to compare the debt level of Japan to Zambia. Indeed Japan is highly indebted. So is the USA, UK, China, etc

    Fundamental question : what currency are they indebted in ?

    Answer: local currency

    They can simply switch in the printer anytime and cancel their debt !

  24. Please can read the article, he didnt say debt is bad, the aim of the article is to reconcile his findings and what the minister and IMF said. All what PF need to do is to respond and correct Mr Mumba with facts if he is wrong. This is the job of opposition parties. Do be quick to reject issues raised without facts. Do your research and send it to Lusaka times for publication rather than bubble without conceiving reasons.

  25. Apart from secret debts we have have secret deals going on to close Zambian companies and push more and more honest families into starvation. We know hear that Mr. Kasolo from the giant ZCCM wants to close Ndola Lime Company.

  26. Zambia’s External debt: $9.27 billion (31 December 2016 est.)
    $8.88 billion (31 December 2015 est.) Definition: This entry gives the total public and private debt owed to nonresidents repayable in foreign currency, goods, or services. These figures are calculated on an exchange rate basis, i.e., not in purchasing power parity (PPP) terms. Source: CIA World Factbook – This page was last updated on July 9, 2017

  27. Financial management of a government is no different from the financial management of a home. You have to live within your means. In either case you cannot always be borrowing to fund every expenditure. What beats me is the fact PF-Foo-ls think that they can go on in perpetuity to fund every government expenditure by debt. This is a cra-zy strategy.

  28. Even the U.S. has debt! Please forget about fear-mongering! Zambia is doing very well. God bless the leadership. Please continue to lock up those who threaten our peace and democracy! No appologies! It is the law!

    • Poor argument. If your rich friend is a drunkard, does it mean you who is poor should also spend your money on beer?

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