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Monday, June 1, 2020

Zambia to start refinancing Eurobonds in 2019

Headlines Zambia to start refinancing Eurobonds in 2019

Finance Permanent Secretary Mukuli Chikuba
Finance Permanent Secretary Mukuli Chikuba

Finance Permanent Secretary Mukuli Chikuba has revealed that Zambia will begin refinancing Eurobonds worth $2.8 billion in 2019.

Mr. Chikuba said the financing of the Eurobonds was expected reduce the cost of debt servicing for the country.

Debt refinancing involves a process where a country or an organisation reorganizes its debt by replacing or restricting its existing debts using funds raised by issuing fresh debts.

He said Zambia’s debt rose from 35 percent of GDP to 60 percent between 2015 and 2016 partly due to the Eurobonds, which were issued from 2012 to 2015.

“We are remaining with just a few more years before the first Eurobond is due. By 2019 or so we will start the refinancing,” Mr. Chikuba said.

He said Zambia would either buy back the debt in Zambia’s name or find other investors to do so over a longer period.

Mr. Chikuba who was speaking during the IMF Sub-Saharan Economic Outlook-Fall 2017 presentation the Zambian said government has embarked on a robust economic reforms to transform the country.

And International Monetary Fund has advised the Zambia government send a revised programme for the 1.3 million package bailout.

IMF Resident Representative Dr Alfredo Baldini said the Fund is still concerned that government has not tackled most of the major issues such the increased domestic and external borrowing.

He said the negotiations between the IMF Board and the Zambian government will continue until the government meets the set out goals by the Fund.

Dr Baldini said the Zambian government should hasten the pace at which it is making economic reforms.

Zambia and the IMF agreed in October to chart a new path towards debt sustainability after the IMF delayed the conclusion of talks with Zambia saying it was at high risk of debt distress.

Last Thursday, IMF Director of Communications Gerry Rice told a media briefing in Washington D.C that the Fund put the negotiations for a Zambia bailout package have been put on hold due to Zambia’s high borrowing plans.

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  1. We lack leadership in this country. Zambia has totally lost it’s bearings. We need good leadership that can steer the ship back on it’s course.

    • The money being leant to Zambia is vanishing without accountability. Our leaders are becoming richer with every loan given to our country.

      If the west were truly interested in our progress, they should stop lending us money. If they insist on lending, let them just transfer that money directly to our politicians, as this money always ends up in their accounts anyway. That money never trickles down to the poor Zambian.

    • >50 years on of peace, but only these effects of mysterious ability in consecutive administrations. Ours is a deeply wounded economy that needs institutional effectiveness. Here we are fiscal recklessness has got us in a deep dive. These debts and the deficit problem threatens the country’s very future. We reversed the economic gains of the liberation age with zeal for an import oriented economy recklessly abdicating our future to foreign economies freely allowing them to mop out all our reserves/ earnings and keep their factories burgeoning. Every little dollar earned is spent on imports leaving the Kwacha vulnerable. Internal capacity and leverage are all but wiped out as debts soar further under terrible liberalization zeal. More warehouses of imports with zero exports worsened by…

    • Look at Senior Citizen being vague and beating about the bush…really laughable…this selfsame “fiscal recklessness” you allude to is caused by the very people you sing praises to everyday here.
      Save us your crocodile tears and your waffling speech!!

    • ….. More warehouses of imports with zero exports worsened by falling tax revenues, explosive unemployment and ever rising government expenditures, need political will. Let’s dive into ratio of national debt to disposable income and massive government borrowing to finance private consumption — such not fascinating combination to know. Lets arrest this insatiable appetite for debts. Most policies only promote revenue leakages translating in wanton poverty on the masses of historic shame. We need to create internal capacity now to regain economic leverage to build the economy, then tax revenues will rise, unemployment arrested. Foreign debts come with toxic conditions with zero equity to Zambia. Look at the Chinese debts, we sign for the money but it’s kept in the Chinese economy. All…

    • Can someone, anyone please point out something, anything that this great lump of money was used for apart from entrenching PF into power.

    • of has been bragging that they will only take development to areas that voted, of cadres should pay for this debt,why do they want to tax areas that did not vote for them?

    • of has been bragging that they will only take development to areas that voted for them, pf cadres should pay for this debt,why do they want to tax areas that did not vote for them?

    • Senior Citizen aka (SC),
      A well learned man who writes good english yet in support of thieves running the affairs of our nation. Mr SC, you are part of the learned bunch of people who have made our country poor. We’ve had finance ministers/PSs who are well educated but only educated in borrowing instead of lending. Look at the man you support in state house, he is ever out and just sitting at state house waiting for an invite. Bwafya bweka bweka.
      If God can allow me to be on that seat, you will all dance pelete because the constitution will be the president and not me. We are currently ruled by men instead of law that is why you support them.

  2. Refinancing!!! Please lets not be misled with such wonderful words…these reckless foooools are simply borrowing on top of existing debt using existing debt.
    If only these lazy morons took time out to listen to Ghanaian President’s on debt.
    Wasted years!!

  3. I will try as close as possible to translate this into everyday language: what he means is digging a new hole to bury old one,,,, asking a new creditor to pay off your debt because you are unable to. In this way you avoid default on repayment. Only thing is that the guy who agrees to buy off your old debt Is not doing this out of kindness or concerns about your wellbeing. These are profit driven sharks. It’s the same as mortgaging the country! Not what you are accusing HH of doing. It’s you!

  4. When we were telling the resident pf kaponya rats on LT that the need to be using those eurobonds only on projects that will start generating funds like manufacturing to stop imports and for exports while creating employment , we were told investors will come flooding in after we build roads costing $1 million/ km……there are no investors , while we still import almost everything and export mostly raw materials.. ….sonta sonta sonta-pooooo

  5. Iwee Bwana PS first state factually to us the utilization of the eurobond funds. We deserve to be informed on how the funds were dispensed into the economy. In pf pockets or where?

  6. The Money just dissappeared into thin air like a furt.At ZR $120 million was injected in, yet the train station at lusaka pamoneka kwati nipa chishala only Jonathan and his cronies skins show a marked improvement they are so smooth.

    • Finance Deputy Minister Miles Sampa has revealed that government has spent the US$750 acquired through a Eurobond issue last September.
      “We gave about US$ 120 million to Zambia Railways, a good chunk went to ZESCO for hydro power generation and we have also given Development Bank of Zambia a good amount for onward lending to Zambian SME’s.”
      Mr. Sampa was speaking on ZNBC Sunday Interview television programme adding that a proposal to borrow more funds will be tabled by cabinet soon.

      “We are in a hurry to develop and the manner in which we have dispensed the Eurobond funds shows our resolve to move fast.
      LT archives – April 1, 2013

    • There you have it …that’s where all the money went to; I wonder which SMEs benefited from those loans at DBZ…we need to track that money that went into ZESCO as well..

  7. ……….. . . .and the only solution is to punish the public then focus on other non issues i.e. Kambwili. and sad to say that this will go quitely even in parliament.

  8. Where are *****s like Peter who parrot unprecedented infrastructure development without considering the unmatched cost that has gone with it? The chickens will come to roost and unfortunately its the poor that will heavily bear the brunt. And this senile Snr citizen is not even ashamed parroting his nonsense when he has been cheerleading these thieving and corrupt characters with their snouts deep into the gravy. Some of you should really be ashamed for having put tribal affiliations against the interest of the majority Zambians, because I cant see any reason why you would support such obvious corrupt practices.

    • Whatever happened to that “sink hole or Sink fund” Fossil Chikwanda was singing about …he needs to brought for questioning before he kicks the bucket for an easy escape like Old man Sata!!

  9. This is nuts. Refinancing debt can also protract the amortization period when debt is refinanced at low yield rates.
    The best cure to this debt crisis in Zambia–the only best cure to this debt crises–is for government to stop borrowing and restructure its fiscal house, manage imports in a more sustainable manner. If you are in a deep hole, and want to come out, the most logical approach is to stop digging, compact the soil and start crying to those above the whole (aka Zambian Experts in the diaspora). And did I forget something? Yes, and for ECL to stop drinking. Perhaps the best remedy Zambians can afford to their country is to recall or remove Chakolwa Lungu as soon as possible before the debt burden reaches 100% of GDP. Begin calling for election tomorrow. In some countries,…

  10. Balemwenako ati ifintu ni fimo fimo te apa nomba mwaamba ukwaluka. Tapalati mukalalila umulopa ba kuwe imwe.

  11. To you all fi upnd rats (cadres) complaining here,”ni ndalama za nyoko?”
    Allow PF leadership to work in peace and wait for HH’s time in 2099.
    They say “amano kuli driver!!”.we cant all be drivers at once.this is PF’s time.the Euro bond was used to do a lot of developmental projects by late Michael Sata(the name your Kainde tried to use in 2015 and 2016 to win votes in 6.5 provinces alas in vain)!!!so we must pay it happily.A LOT OF UPND RATS COMPLAINING ONLINE LIVE ABROAD SO THEY DONT SEE SPLENDID PROJECTS DONE BY PF ACROSS ZAMBIA SINCE 2011!!!all the monies were used properly!!!
    Come 2021 ni PF nafuti nafuti!!!
    NJIMBU BB 2017!!!

    • Stop behaving like everything is ok. Cant you see that it is illogical to pay off one kaloba using another kaloba? This has nothing to do with political parties and what not. You are a Zambian and ought to be concerned with the economic outlook of your country.

  12. @Banda Lungu Forwell-real name: Hamasaaka Forwell;stop smoking dagga.the more you talk about beer drinkers,the more your HH loses votes because HOW ZAMBIAN VOTERS DRINK BEER AND FEEL INSULTED WHENEVER UPND FOLLOWERS/LEADERS CALL ECL “CHAKOLWA”?kekekekekekeke continue insulting voters!!!in 2015 and 2016,i personally heard several Zambians in bars saying “we shall vote for ECL whom upnd call a chakolwa because he is one of us”!!!AND FOR SURE THEY VOTED LIKE THAT!!!Zambians in many bars are behind ECL!!!SO IN UPND,YOU MUST CHANGE YOUR STRATEGIES BECAUSE POLITICS OF NAME CALLING IS WHAT HAS BEEN MAKING HH LOSE ELECTIONS SINCE 2006!!!
    Njimbu bb 2017!!

    • Look at this chap thinking of bars and voting for development from bars……no wonder PF are trying to drag Zambia back to the imf who have seen that they can not deal with the drunks in PF …….just keep on dancing and building more toll gates…

    • That’s what makes this whole saga so tragic is people like Njimbu or whatever.
      And that’s all what PF cadres know. Instead of debating how you got here and what the implications likely to be, he or she defaults to name calling and insulting HH, a man who is on record advising your government against careless borrowing!

  13. @spaka like lilo:every vote account badaala!!!
    For your own data,i dont drink and i have never tasted beer in life but I CANNOT INSULT THOSE WHO DRINK AS ITS THEIR RIGHT!!!
    For your Kainde (HH) to (WIN) enter state house,he would need every vote even from drunkards.this is what i meant!!!one thing you must know is some people who drink beer are far much good and wise than your greedy HH.SO STOP LOOKING DOWN AT CERTAIN ZAMBIANS FI UPND!!!
    NJIMBU BB 2017!!!

    • And what has that to do with the debt issue at hand???? That is the problem PF have not even humbly Dumbly is ready to face the real issues they have dumped this country into. He would rather talk of elections and how he is so popular he can beat anyone and how everyone is scared to challenge him ……… I agree really wasted years with this guy


  14. Borrowing is not the issue here, it’s what we do with borrowed funds that appears to elude us Africans. The government needs to tighten up on corruption and loopholes when it comes to public finances. Corruption should carry a minimum of 15 years prison sentence to serve as a deterrent. Europe solved this by sentencing people to death by hanging if found to be corrupt. Lending someone money is not the same as giving. I’m sure most bloggers on here have experienced this sort of behavior at some stage even with your closest friends or relatives. We need to change our mindset to stand any chance of meaningful development.

    • I totally agree with @futureZed .You see, when we borrow we must be borrowing with a view to investing in those projects that are profit-making. For example when you borrow to build a bridge, there must be toll gates on both ends of that bridge so that you are able to raise some funds to be channeled towards repaying that debt. Another example is the Copperbelt International Airport.This air transport facility is being built at a huge cost with borrowed funds. What is our strategy for paying back the funds?

  15. It was at this same event where the IMF said Zambia has the largest debt in sub Saharan Africa and with a economy growing at a snails pace. If that’s the case how are we going to pay back and where is the money coming from? The current leadership in Zambia needs to wake up! We are running to IMF yet we are busy spending $42,000,000 on fire trucks which are NOT a priority!
    If this guy spoke before the IMF he might have felt like a clown with no make up after.

  16. When we say that these clueless minions are at variance with prudent economic management, the PF kaponyas rant like rabbi d dogs. Who borrow to buy those wheel barrow at such inflated prices, ambulances at obnoxious rates? That money could have been invested in creating small scale industries that will add value to the copper on the copper-belt there by creating a stream of added value and income to the treasury. The guy from the IMF has been succinct and at pains to explain that even the relationship is at saga because PF goons have not been transparent in their dealings. This Mutatai is a curse that should purged forthwith. Nothing is working out at all.

  17. E.g. borrow $ 1bn then grow avocados, harvesting in 3 to 4 years – export like Mexico and everyear you make $ 1bn.. I have started nurserys. The market for food is overwhelming.

  18. No 2.
    Deal with the
    Civil Service (personal employed to punish the public) and its inefficiencies.
    Down size to levels of efficiency and send the rest home but pay them the salary without benefits!!

  19. Bonds are the cheapest source of financing but you normally refinance at a premium but accept able since there’s a mismatch between infrastructure income reinvestment streams and term structure its known that investments in infrastructure is key in global growth drivers and is a strategic priority for any country and many countries that have accerated infrustrlucture and competitiveness have seen improvement in quality of peoples lives

    There are various options of financing to explore as part of that financing plan

  20. Rebalance also country’s exposure to one partner and allocations of infrastructure then infrastructure is not only road heavy certain soft earliers are a concern also as you reap revenues from roads commissioned

  21. We look forward one day for zambias infrastructure to be listed and self refinance also like the Ndola dual carriage way

    Global infrastructure is an asset class normally traded like equities or currencies explore other options and do not be narrow Zambia is self financing apart from commodities but quality will count//

  22. Government financed led projects often will show in bad bank balances then it cannot only be gov ,maybe only for those real public good of real critical some will simply require a taxonomy of instruments and incentives to bring private sector to investment like the current PPP drive promotion we are seeing gravazio of znbc promoting

    Then the acts on infrastructure are inadequate for sector way forward//

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