Minister of Finance Alexander Chikwanda addressing the gathering.
Former Minister of Finance Alexander Chikwanda

Zambia’s external debt may grow by more than 40 percent to $13 billion next year as the cost of planned projects are added to the total, and debt-servicing charges could double, according to former finance minister Alexander Chikwanda.

The government of Africa’s second-biggest copper producer could face debt-servicing costs of $1 billion next year, from $500 million to $600 million this year, due to new loans, Mr. Chikwanda said Sunday in comments broadcast on state-owned ZNBC television.

“If we are to be honest, there are also pipeline items. So by the time we go into next year, our external debt would rise to as much as $13 billion, at which point debt servicing will become quite critical,” said Mr. Chikwanda, who served as finance minister from 2011 until 2016. “It’s going to be a challenge to service the external debt.”

His statement could fuel concerns about the sustainability of Zambia’s foreign debt levels, which has helped make the country’s Eurobonds the world’s worst performing this year.

Already, external loans ballooned from $2 billion when Chikwanda took over as finance minister to $9.1 billion at the end of February, and the International Monetary Fund said the country is at a high risk of debt distress.

Some investors are worried Zambia’s debt levels may be higher than the official number, but government says its totals are accurate.

Finance Ministry officials didn’t immediately respond to text messages seeking comment.

The country will probably have to refinance its $3 billion in Eurobonds, the first $750 million of which falls due in 2022, and investors will be “very happy to,” because of the attractive interest rate, Mr. Chikwanda said.

With yields on Zambia’s $1 billion Eurobonds due 2024 at 10.8 percent, that could be costly for the government.

The southern African nation will need to re-negotiate some of the loans it got from Chinese lenders, he said, echoing statements from current Finance Minister Margaret Mwanakatwe.

Some of the projects they financed were too expensive and Zambia can rely on its good relations with China to get more sustainable loan terms, said Chikwanda, who serves on the ruling Patriotic Front’s central committee.

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47 COMMENTS

  1. Intelligent guy this Chikwanda guy. Not sure why his party in government has struggled on economic and governance issues

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    • We have been Consistently opposing contraction of these debts. Unfortunately we have continued compounding debts. The most recent stand some of us have put up is against another toxic IMF loan. We’re expertly grounded in matters of Finance and Economics. As such we know what we are opposing. Money contracted is never free to Zambia. A forensic look at our internal revenues and external debts two main variables to analyze as they determine the direction of a nation’s stability of the entire performance of it’s economy, you will understand that our debt crisis is now acute. We have lost leverage in all fronts rendering our economy frail and prone to dictates of renders. Time to draw in independent minded experts to guide embattled politicians.

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    • Really laughable..very soon you will be saying he should comeback as Zambians are too forgetful

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    • PF claims they never stole money for campaign, it was Chikwanda funding them. Now Chikwanda is also tired with thugs and scammers.
      He wants his money back.

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    • And yet the money being borrowed can not be accounted for.

      This Lungu government is a total sham.

      God help Zambia.

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    • That’s when this UGLY STYOPET DINOSAUR called Chikwanda has awoken. We condemned this DINOSAUR’s huge appetite for loans, even the time he traveled with Miless Sampa to Europe to get same EURO-bonds he’s condemning today. I remember a photo of them celebrating with headphones on, after raising $750-million. Mxxxm!!!

      People died to achieve HIPC. In just a few years this UGLY DINOSAUR drove our country down into a worse debt hole/trap of US$17 to 20 billion with no tangible investments (for future revenues or returns) to show for it.

      This UGLY DINOSAUR needs to be jailed for indebting our country twice. First during UNIP era, and during Sata’s era.

      He is again involved in the stealing for Zambians through his son Bwembya & Chinese, by increasing of tender value of KK Int’l…

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    • Why even say Zambia is borrowing? We all know who is pocketing the money. Please don’t include all of us like we are beneficiaries of these loans. How come icalo is getting munkongole and he’s getting richer?

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    • Is n’t he the originator of this debt? He was the Minister of Finance who was bullied by MCS to ‘find the money.’

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  2. Very intelligent this Chikwanda guy. Not sure why is party in government has struggled so much on economic and governance issues

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  3. Let us be honest here!! we want to develop but Malls, and other silly building would improve the economy. Why are we borrowing??
    We can borrow to improve agriculture since copper prices fluctuate and there is so much corruption between PF and mining investors, as result we do not get enough taxes to sustain our economy. For God’s sake where are the controlling officers in the country and why are we watching all this nonsense by PF.

    Let us raise against this government by voting them out of power.

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  4. Let us be honest here!! we want to develop but Malls, and other silly building would not improve the economy. Why are we borrowing??
    We can borrow to improve agriculture since copper prices fluctuate and there is so much corruption between PF and mining investors, as result we do not get enough taxes to sustain our economy. For God’s sake where are the controlling officers in the country and why are we watching all this nonsense by PF.

    Let us raise against this government by voting them out of power.

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  5. Let us be honest here!! PF government is a bunch of criminals who are ruining the future generation.

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  6. There is nothing like it will balloon to US13billion, its already that amount. This moron, knows what he did when he was finance minister by borrowing like no man’s business. People like you should not even comment on such issues. You have let your country not once but twice with your misguided economic mismanagement and myopic financial literacy. You had a chance to make things better like Magande alas your was the most useless financial misconduct full of uncontrolled borrowing. We are in this economic quagmire and doldrums because of you. Shame on you.

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    • Chikwanda is personally financially secure but he forgets that if there is general economic failure, even his businesses can fail and his real estate can stay un-occupied with no one to rent them. But he doesn’t consider that a possibility because of his shallow economic literacy which was the main cause of the careless borrowing in the first place. He is the one who moved the bill in parliament to raise the govt debt ceiling despite the sensible protestations of the opposition and civil society. He is lucky the interviewer was from the state broadcaster who could not take him to task for the bungling that accompanied his time at the finance ministry.

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    • As said on here many a time, Mr Chikwanda is one of the main sources to the problem we are currently in…. I’m sure a huge chunk of the so called proposed $13B is in one of his off shore accounts, that have been propped up by his sale of our mines and awarding of other tenders to his friends in china…. Dinosaur you belong in Jail…

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  7. HH is a bunch of criminal with inside trading practices which made him the chief privatization thief.

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    • This so called Sharon is actually a Chainama patient. Its not a lady but a man….In Chainama because of obsession with tribalism.

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    • Iwe ka Sharon, na manje ukalibe ku suka ka uvuni kako konunkha?
      Please take the advice, your brain will begin to function normally once you clean your ka-moosoola.

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    • This lunatic only disappears when you insult it hard for blogging crap non stop.

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    • Sharon you an *****. We are not talking about HH here. What kind of a fool are u? Your pfool party has failed lamentably

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  8. @Sharon, are you on your periods? Don’t comment blindly on this that are averse to you. You show your deluded ignorance by focusing on HH. Seems like you dream sleeping with him all night? Mappet.

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    • ci Sharon chena cikopo mwee. PLEASE DON’T COMMENT ON ISSUES THAT ARE BEYOND YOUR UNDERSTANDING, iwee kolwe musula obe.

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  9. The debt situation started to spiral out of control during your tenure of office sir. The Eurobonds were secured during your term with your then Deputy Finance Minister Miles Sampa who glorified the Eurobonds so much promising heaven on earth. Now you are telling us that within 6 years off PF’s rule debt will have short up by $9billion from $4billion when MMD left. This is no longer a joking matter, there has to be accountability.

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  10. Bamudala is intelligent but also desperately crooked! He has done it again the way he did it during KK’s time – borrow blindly left right Centre and say the debt is sustainable and before you know it, he disappears and watch from a distance as the country drifts mindlessly like a drunkard towards the HIPC abyss and he pretends as though he was not the Architect! The question is why is MOF with all those degrees failing to tell us what our debt stock and debt level is? Isn’t it true that the biggest thieves are the so called educated – because they steal systematically through the processes and leaving little or no trace? The truth is PF has been borrowing for their pockets and they have laundered stolen borrowed money through RDA at State House!

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  11. May the debt balloon further. Maybe there will be no more money to steel through so called developmental projects.

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  12. Chikwanda is calling out “fire ,fire ” yet he was part of the team that set the match alight.Hypocrisy bcuz it was him who set this ball of high debt & low economic growth rolling when he was at finance.

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  13. ABC is very intelligent and is interview on sunday interview was very optimistic he showed and explained how the gov has borrowed to finance infrastructural projects on which the economy should he emphasized for renewed investments in manufacturing to optimize the already skill sets that zambia already has to register those growth rates to ensure the revenues trickle to avoid further debt borrowing to finance consumption and mostly salaries for grz employees that otherwise could be restructured to reduce close to 75% expenditures he also showed how well the borrowed funds have be invested and could be seen much more progressively than other similar…

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  14. governments he also showed how the quality of zambia’s debts are (canadian and us pensions) and how they could be restructured in an event that the zra revenues and re investments failed to provide the sinking fund provisions

    He showed how our demographic dividend discounted from GDP growth 4% projections is still below the potential economic output for Zambia he talked about some asia country in comparative that has seen its GDP growth fourfold yet Zambia is much dearer and better placed

    Replay his entire Interview Very insightful and educative ABC

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    • ABC obviously your grammar is very poor so i doubt your grasp of complex economic issues too.You don’t have a clue what you’re sayin.

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  15. GRZ needs to adopt a resistance economy to beat this debt trap…….list all imports and start creating factories to feed local demand.
    Why should Zambia import $10s of millions of GRZ work and uniform cloths when we grow cotton ?
    Why should there be a duty free import on solar products when assembling them in Zambia using our copper would make more sense ?

    The main hurdle here is GRZ mindset that everything must be left to the private sector because they , GRZ , are creating an enabling environment. GRZ needs to take the lead in creating there plants then maybe floating them…

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  16. “Ati some of the projects were too expensive for the borrowings Zambia made”.
    This is coming from a former PF finance minister who is at the centre of increasing the cost KKI air port project. Chitotela another minister Bemba thief revealed to the nation that the increase of KKI air port was done by Chikwanda who pocketed the money and not him Chitotela. What a shame from this old man without a heart for Zambia and his children’s children to come and pay for his sins.

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  17. Kwena the kaponyas enjoyed…..ati
    .” if the USA and Japan can borrow for infrastructure so can we…..”

    …people tried to say bane , stop spending on projects that will not immedetly contribute to the GDP ….we were told

    “…..ma jealous fye…sontenipo..”

    What is bamboozling here is you have built all these roads for the unemployed youth to be loitering on while the Chinese and Indians are now efficiently exploiting and exporting our natural resources at speed because they have new roads to access every where…..the few locals they employ as guards or tanspoters of the richers they reap or rape from mother zambia in unison with the corrupt few.

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  18. Kwena the kaponyas enjoyed…..ati
    .” if the USA and Japan can borrow for infrastructure so can we…..”

    …people tried to say bane , stop spending on projects that will not immedetly contribute to the GDP ….we were told

    “…..ma jealous fye…sontenipo..”

    What is bamboozling here is you have built all these roads for the unemployed youth to be loitering on while the Chinese and Indians are now efficiently exploiting and exporting our natural resources at speed because they have new roads to access every where…..the few locals they employ as guards or tanspoters of the richers they reap from mother zambia in unison with the corrupt few.

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  19. Mr Chikwanda and Fred Yamba bequeathed a huge national debt and huge unfinished projects in the name of infrastructure development to poor hapless Edgar Lungu. And poor Lungu thought this was a selling point, sontapo. Well it is, until the debt hits us hard.

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  20. But not all hope is lost. President Lungu can overcome these challenges before 2021 by focussing on low hanging fruits to achieve stronger economic performance. Cardinal among the low hanging fruits are improving business health and confidence. The President should also strongly consider removing those upnd cadres in the civil service who are receiving salaries for doing upnd assignments to sabotage national economy. Start by writing them warning letters so they that we know them.

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  21. Uncle Chikwanda knows that the debt is more than 13 billion; but he is associated with increase in debt himself;

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  22. Chikwanda is basically saying he knows of debt which has not been included in Margaret Mwanakatwe’s figures. Is it not a sign of maladministration to hide debt data? It’s all Chikwanda-created mess but Maggie Mwanakatwe’s problem to deal with now. Poor lady, but she has to live with it now.

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  23. Im falig to comprehend the gist of Hon Chikwands’s statement. Is he being remorseful that he drove the country into ubsustainable debt or is he trying to exhibt his sfinancial analytical acunem?

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  24. You can protest till you all turn frothy but the wages of cranial-laziness are here to stay UNLESS YOU ALL STAND-UP for your so-called Country; You saw a God in KK, saviour in FTJ, a megadiplomat in RB the Robber, believed the Serpent MCS and his Cabbage Rantings and they killed that one and ONLY son-of-the-soil LPM whilst you boozed into economic Stupor….its PAY-BACK, each one for the personal sin and collectively for national asslickery and laziness – YO COUNTRY IS GONE !!!

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    • DON’T JUST BLOG HERE – ACT! STAND-UP FOR YO COUNTRY…in fact the poorest and most bludgeoned are not here, they are OUT THERE finding Food for their loved ones, and they will do that forever till YOU DIM-LIT bloggeristic onanists ACT! STAN-UP FOR YO COUNTRY !!! Poor Mama Afrika….Jesus stopped weeping Long, Long ago…

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  25. Dept of Insolents! Hooligans! Bullies! HaLLUcinations! HaDelusions! HaIllusions! HaDreams! HaTribes!

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  26. This is nonsense. The debt comes with conditions which include spending money to pay western finance ‘experts’ advisers etc. The rest of the money goes in payments to local politicians including the president as bribes for getting the debt (its all done in a legal way but essence does not change). And the common man has to pay back the so called debt that he never saw or benefited from. Pay back in terms of chronic austerity, lack of schools, healthcare, security, social nets, raised taxes etc all in sacrifice to “service” the debt. Zambia is a failed state with no future. Their own economies in so called west are on the brink and they cannot sustain their privilege, they will suck every last drop of wealth from countries like Zambia in pursuit of prolonging their privilege…

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