The Centre for Trade Policy and Development has urged government to pursue the refinancing of Zambia’s sovereign debt with great caution.
CTPD Executive Director Isaac Mwaipopo said Zambia should avoid projecting desperation if the country is to find sustainable solutions that will help it navigate through the growing debt crisis without further indebting the country.
Mr Mwaipopo further said there is need to clearly define what the country hopes to archive or get out of this restructuring efforts warning that failure to do so will just leave the country in more debt.
Mr Mwaipopo said the move by the Zambian government to seek help in refinancing the US$ 750 million Eurobond scheduled to mature in 2022 at this time may translate into increased costs due to the suspended IMF bailout program package.
He said Government should concentrate on realizing fiscal consolidation and the operationalization of a sinking fund.
“The Ministry of Finance informed the general public in 2017 that the government would operationalize a sinking fund that was to help government set aside funds for the repayments of Eurobonds when they fall due after 2021. This strategy had the potential to reduce the risk of default and ease pressure on debt servicing when the Eurobonds Mature,” Mr Mwaipopo said.
“Bond refinancing works better when a country’s credit rating and macroeconomic conditions improve because this could translate into lower yield rates on bonds. If a the yield rates fall below the coupon rate of the Bond, refinancing using the same terms as the original bond would translate into servings,” he said.
“Furthermore, the terms of the new bond can be altered to allow for better repayment terms. For Zambia, following the increased illusiveness of the IMF bailout package, and the adjusted debt-sustainability assessment from medium to high risk of debt distress, Zambia’s dollar securities became the worst-performing in the Bloomberg Barclays Emerging Markets USD Sovereign Bond Index, which includes more than 70 countries.”
He added, “CTPD is of the view that the Zambian government should first work on improving its credit worthiness by reengaging with the IMF and pursuing visible fiscal consolidation. Bond refinancing can then be done at reduced cost to the Zambian people.”
Mr Mwaipopo continued, “We are in agreement with the recent recommendations advanced by the IMF’s Resident Representative when he said government should not to tap into the international market at this time as the financing conditions are pretty tight right now, and would be very expensive.”
He stated that government needs to trade cautiously as it explores refinancing options adding that there will be need to count the cost and clearly establish payment plan from the very onset, otherwise it may turn out to another huge cost to the Zambian economy and the Zambian people.
“If Zambia is to acquire a bilateral financing bailout from Turkey, at what cost will this be What is in it for turkey? he questioned.
Mr Mwaipopo has since called upon the government to publish full details of the reported 12 trade and economic deals signed with Turkey.
He said this will help the public to know and appreciate what the country may be getting into as a country.
Maggie Mwanakatwe is essentially involved in damage-limitation after President Lungu’s ill-advised disclosure in a meeting with the Turkish leader. ECL really dropped a clanger as they say in English. They will get to know international bond markets the hard way. They can really be a bitch as many governments have found out in recent years.
Please read article below
zambianobserver.com/why-the-turkey-refinancing-arrangement-is-being-considered/
It’s a waste of energy to even talk about our country situation. Our leaders balitusula. They don’t attend debates, no press conferences to explain what’s happening, they give us a finger but we still vote for them. What are we complaining about? We love these guy.
Shut up and just sit back and enjoy. We are *****s
EURO-bond is just a small part of the bigger problem:-
1. Kenneth Kaunda International Airport: $360 million (2014)
2. Poverty reduction projects: $13.5 Billion (2012)
3. Poverty reduction programmes: $6.7 billion (2011)
4. 750MW Kafue Gorge Lower Power Plant: $1.7 billion (2015)
5. 360MW Kariba North Bank Power Plant Expansion: $430 million (2014)
6. Lusaka L400 roads: $300 million (2013)
7. Copperbelt International Airport (Ndola): $400 million (2017)
8. Lusaka de-congestion: $286 million (2017)
9. Communication towers: $280 million (2017)
10. Copperbelt C400 roads: $418 million (2015)
11. Chipata-Serenje railway line: $2.3 billion (2017)
12. Mongu-Kalabo Road: $287 million (2011)
13. 2,000 Military Houses: $157 million (2017)
14. Mansa-Luwingu road: $242 million…
CONT’D
15. Water and sanitation programme: $135 million (2016)
16. Mbala-Nakonde Road: $180 million (2011)
17. Lusaka sanitation project: $130 million (2015)
18. Kafubu water and sanitation project: $104 million (2014)
19. National Heroes Stadium: $94 million (2011)
20. Levy Mwanawasa Hospital Expansion: $90 million (2015)
21. Kafulafuta Dam water project: $449 million (2017)
22. Housing project for security wings: $275 million (2015)
23. International Development Assistance programme: $600 million (2017)
24. Rural roads project (World Bank): $200 million (2017)
25. Environmental Remediation and Agribusiness Development: $106 million (2016)
26. Miscellaneous small loans: $300 million (estimate)
27. Debt position of previous government up to 2011: $3.5 billion
28…
CONT’D
28. Lusaka-Ndola Dual Carriage way 2018: $1.2 billion
When Chikwanda and Miles Sampa were indiscriminately borrowing, HH cautioned against this. He was called bitter. Margaret Mwanakatwe went on the floor of parliament and said we should continue to borrow. Now look at were we are at. Edgar Lungu and his caninet are clueless on the economy
Fellow zambians, you don’t have to be an economist to understand all our government imbecility in this all thing. First, how can you borrow money to pay other borrowed money after IMF has rejected you. If IMF can’t lend you money, that means you’re in deep trouble.
The act of borrowing from anyone is a sign of desperation.
Truly this man has no vision no honour and no pride.
We are now like those beggers on Cairo road on the world stage.
No one respects beggers!
When we told you right here on LT that the debt levels were unsustainable …we were called all sorts of horrible names, today those bloggers who were even against IMF assistance like Senior Citizen are mute when PF govt intends to borrow from the Turkish mafia, where is JUNIOR who is always singing praise for his friend Maggie.PF was warned but continued borrowing for consumption…even today they don’t want to cutback, they still want to continue living like Kings when they are indebted; constructing a dual carriage road for $1.2 billion when they can do it for less than half.
Just click through the related stories links on LT and see how these bloggers criticised us …check the thread and see if they have commented today; some have even changed goal posts without shame.
The Problem with CTPD is that its Analysis has been shallow. CTPD needs to get cracking on economic issues and unpacking them and not this lip service kind of analysis. We dont even know what the organisation standards for anymore. It is all over. Ukwalola umwela. Focus shaaaa.
Paul – There you go trying to heap blame on something or somebody….what in-depth analysis do you want? You now want CTPD to crack on economic issues and unpacking them to whom? You don’t need an economist to tell you that, a marketer can tell you that you are in deep trouble or in the sh%t due to reckless uncontrolled spending or lack of fiscal discipline of this PF govt of arrogant empty tins.
I am surprised that we are not being called bitter by cadres like they did 5 years ago on LT …its starting to sink in there thick empty shells; those cadres are now hiding in the ceiling like filthy grey rats…did we not tell you that its our children who will suffer because of this recklessness just 6 months ago Maggie was reassuring us that everything was manageable but roll on July its a different story you are begging from private entity for assistance without shame. When we tell you that those statements she posts are not worth the paper she prints on you think its a joke …and BR MUMBA JUNIOR is busy cheering with silly catch phrases like an educated foooool he is; you think her statements holds water…its your children who will suffer.
We are still waiting for news of those 5…
We are still waiting for news of those 5 ministers who were sent to China, they came back and no one updated us….only one can wonder what State assets they sold to the chinks in Beijing.
Turkey ain’t gonna bail Zambia out for free they’ve got their own 80m people and 3m Syrian refuges to take care of 1st.Keep extending the begging bowl its embarrassing Zambia.
The Turkish govt rolled out a debt restructuring and social reforms package costing nearly $6 billion before the elections a few months ago it was no money laying around…its only a fooool like Komboni Lazy Lungu who goes to his friends house in Kabulonga sees a house, vehicles, green lawn,maids thinks that he has alot of money to spare.
Letting PF negotiate anything with private entity is just suicide
Majority of Zambian’s are happy with a clueless inebriated leader, who is more Disco dancer than statesman.
The majority of Zambian’s enjoy being in severe unsustainable debt, poverty, despite having been so lucky to have had the debt wiped out a few years ago.
Majority of Zambian’s enjoy poverty, cholera, negative growth, lack of proper medical facilities. To them this & Black mountain means development, & surging into a first world nation.
Majority of Zambian’s believe a flip flopping charlatan like Miles Sampa, will deliver for them, develop Lusaka, & not plunder, despite Miles hopscotching from party to party, as Miles is really a speculative gambler, who goes with the party he believes will win, hence enabling him to plunder & eat.
Conclusion, majority of Zambian’s would…
So here lies the folly of a flawed Democratic system.
Democracy, with a largely illiterate citizenry, & a few educated non analytical thinking citizens will always end in tears.
Mark these words in 10 years from today, & see how Zambia will be non functioning like Congo Zaire.
Imagine this lazy man intends to refinance loans due to PF govt’s utter recklessness and he has not come out via a press conference and reassured the nation, business community..but when its campaign time he is there dancing on stage with a microphone in his hand like Koffie.
Jay Jay, for these shameless P.F Vultures taking us back to vulture funds, holding a Press conference does not even feature in their heads.
Pombe – Chakolwas equally lazy dishonest chancer of a disciple, Kilometres Sampa run Miles (pardon the pun), from an important pre election debate, & still these thick planks voted for Kilometres, who is now filling his belly on taxpayers cash like there’s no tomorrow as we blog.
UNFORTUNATELY PEOPLE WHO CAN CLEARLY SEE WHAT’S INHERENTLY WRONG WITH P.F, ARE SADLY IN THE MINORITY, SO WOULDN’T SURPRISE ME @ ALL IF KILOMETRES IS PUT IN STATE HOUSE, SHOULD THE UNLIKELY HAPPEN, WHERE POMBES 2021 BID BELLY FLOPS!
Keleni Mutaware a sumbule – Just look at the Pictures section on LT today ….Lazy spend the whole day entertaining and courting the Turkish Dictator he welcomed him in morning at KKIA with his whole cabinet and escorted him in the evening at KKIA with his whole cabinet, the Turkish Dictator didnt even sleep over as he has work to do…this is clearly a workshy man of zero work ethic or zero priorities; last week the utterly lazy dingbat declared a national holiday for elections held in Lusaka …for what? That backfired as only 15% turned out to vote…a serious President would have taken it up with ECZ but no this bum Edgar; now he is look forward for the next by-election in EP.
This utterly clueless lazy empty tin Edgar has no understanding of productivity and is in no capacity to…
of productivity and is in no capacity to steer us out of trouble…these are wasted years the boat is just sailing aimlessly to the inevitable.
I am glad it WILL NEVER be President!
Pf has only just taken us back to vulture funds. Indeed they are dununa reverse . When you have a corrupt rat in power you cant expect any less. What Zambia needs is a savvy economic manager who understands how the macro and global economy works. Ignorance has killed this country. Vote upnd
Maybe, just maybe, we simply are not intelligent enough as a collective. I mean, we keep electing them. ??????????? We refuse to address a flawed constitution. We refuse to allow critical thinking into our curriculum. We continue to look up to the corrupt wealthy. Maybe this is it. We insist on name calling over objective reasoning. We say one Zambia one nation while freely making offensive tribal remark.
Niba cimbwi no plan.
Indeed no plan of repaying the debt now we resort to seeking the assistance of another country. As HH puts it,chimbwi no plan. They invested that money into useless ventures that have lamentably failed to make money. The toll gates are not doing the magic??…….I bet the IMF will quietly convince Turkey not to assist us and the people to suffer most is us the commoners. For ECL, his relatives and friends will go abroad in the eswatini mansions they are building and then foreigners will completely take over this country in order to recover their money
There is a plan and Gov knows the concerns about turkey Refinancing is like shopping around The statement by Minister was very enlightening and shedding more on those plans There was strategic considerations for issuance of the bonds its only some mismatch in the cash-flows from Invested Infra sets
Unlike yesterday by Bamusoka on ZNBC ,Mwaipopa of CPD has correctly advised and is in line with DU but those of US commenting here must exercise responsibility by not adding more speculations about the quality of Zambias Bonds and further add spreads to the cost of refinancing There are risks in the turkey and as the minister engages transactional advisors both…
both legal and other to refinance the maturity,repayment or currency whatever we need to support her for the country not as a political party because even them may not navigate better than her as analysed from their capacity exhibited The current leadership is better placed as 1st time sovereign bond issuer and have learn lessons
However i do not support the political credit and country risk turkey and the minister should be encouraged to shop around for a long-term value investor in the Zambian bonds no scalpers or speculative ones as that will be costly
Are you still in Grade 12C? What is this gibberish you keep posting…read through your post aloud to yourself.
Comment:PF nimbwa sheka sheka. aba bakolwe batuposa mubwafya sana Ubukulu.
Animo Farm has their barn accumulated with cow dung and it is causing MAD COW DISEASE. Chronic losers!
Comment: where is comment lmwee ba PF cadres
When you remove their silly HH and UPND from the equation…they have absolutely nothing to contribute as their puerile brains can not function outside the box or engage, its like having no by elections campaigns and suspending pointless travel outside Lusaka for Lazy Lungu …what can they say on this since everyone will be paying the price for their recklessness and folly.
When we tell those cowering rats that we are above partisan politics it does not register in their silly empty tins…look at them nowhere to seen today to embarrassed to even sonta sonta!!
This uproar against Lungu is misplaced. It is totally clueless. The greatest blame lies with, We the People.
The people can correct this folly, incompetence and reckless criminality if they chose to. Even now. Even today, through removing the shameful incompetence of Lungu and PF.
No one in the history of the presidency of this Republic has through unbelievable ignorance worked tirelessly to destroy this country as Lungu has. When the history of Lungu’s horrible era of criminal errors is chronicled, it is the people not Lungu who posterity will indict, for letting a 60 year-old 6 year-old brained leader bring the Republic to its knees. Stop blaming Lungu. Blame We the People for not removing the PF and Lungu.
“UPND is a TRIBAL HORGANISATION AND A TERRORIST HORGANISATION that one of its members said “ONLY A TTNGAH” CAN BE PRESIDENT OF UPND.” “Incompetence cry,” “Corruption cry” “thie cryf’ are all coded words from the Hatribes Association of Zambia that feed on biased coverage of Galu Watchers in Zambia. I am glad HH will NEVER be president! The writing is on the wall! This government will send him into retirement in 2021. Watch this space tribalists!
Meant “Thief cry!”
I am glad he will NEVER have any opportunity SELL Zambia! He will NEVER be President! Childish!
When you remove Lungu and his great agenda of developing this nation Hatribes have nothing to contribute! When their leader appears they go into hiding when the president comes on this forum they start playing for Monze Swallows.
Sharon, so you know. Iam partless–absolutely an independent and I do not support HH/UPND. Iam a pan-Africanist who loves Zambia and Africa! Iam immune and beyond the narrow-mindness, ethnicity, rotten “tribe-fullness” and pettiness associated with others. My commentary is objective and is as fact-filled as it is honest. In fact, it is a folly to argue that HH /UPND will correct Lungu’s Excesses. Lungu/PF has done so much damage to Zambia that even the incoming post-Lungu leader/party–whoever he/she or it is–will need more than 20 years by some estimates, to bring Zambia from the brink.Sharon, in the 21st Century, we should be patriotic, objective and peddle evidence-based arguments, away from defending the rubbish of tribe!
Economics is like a broken down wall clock.
It gives you the correct time twice in 24 hrs.
Its about the perception you are negatively creating for the quality Zambian Bonds still Invest-able in the initial placement area You are effecting negative perceptions unnecessarily You giving in-accurate negative market perception about Zambia the issuer of the sovereigns The minister has given a very good comprehensive and timely information on political ,economical and austerity measures to secure and confirm access to the international capital markets at reduced refinancing costs without creating panic or cases of contagion
Class of 1995 12C
If others are marshaling Zambia is also better placed to USD 3 Billion should not blind your potential
“Saudi Arabia is to invest US $10bn in South Africa’s energy sector”
Africa Investor
“Nigeria to invest in expanded electricity generation with $5.2 Billion World Bank loan”
Afk Insider
“Standard Bank and ICBC identify $10bn worth of projects in Africa”
Business Day
No matter how much you loathe ECL, he is and still will remain popular and salable. Your posting of unprintables won’t change anything. PF and ECL constant.
Lazy jj, what is your take on tribal h.h??..
There has not been caution on borrowing, that is true. But fellow Zambians all we had before infrastructural improvements were poor roads with pot holes the size of swimming pools. Poor hospitals. NO SHOPPING MALLS….(imagine)!
My point is that we should also remember the bad old days and balance our criticism. We are all agreed there was reckless borrowing and some bad management of projects. But we are reaping the benefit of these. Unfortunately, economic climates change and if you want to rant at someone…try Trump who is setting trade wars left and right unsettling our trusted Chinese friends.
What’s in it for Turkey? Apparently, there is a large consignment of Turkish sandals( you know the ones that curl up at the front); on the way to Zambian Markets! They want to improve their exports ….woe is us. I personally draw the line at Turkish Delight candy…..it’s Glucose, Sucrose and some Rose Water to make it palatable, but a horror for diabetes.