Home Headlines Government borrowed US$2.6 billion last year despite debt pile up

Government borrowed US$2.6 billion last year despite debt pile up

Zambia's Finance Minister Margaret Mwanakatwe
Zambia's Finance Minister Margaret Mwanakatwe
Zambia's Finance Minister Margaret Mwanakatwe
Zambia’s Finance Minister Margaret Mwanakatwe

Bloomberg reports that Zambia, which the International Monetary Fund has warned is at high risk of debt distress, contracted an additional $2.6 billion of new external loans last year, according to the Finance Ministry.

According to the Ministry of Finance Annual Economic Report for 2018, some of the new loans contracted by the Government in 2018 include $908m from China EXIM Bank, $402m from Industrial and Commercial Bank of China, $375m from Saudi Fund for Development and $273m from Eximbank of Russia.

Zambia Africa’s has boosted spending on infrastructure including roads and airports in recent years, which it has largely financed through external borrowing.

The projects are an investment for the future, according to Finance Minister Margaret Mwanakatwe.

If the funds are disbursed, they’ll increase the southern African nation’s external debt to $12.7 billion, from $10.1 billion at the end of 2018. The new loans suggest the government is too complacent about rapidly increasing debt risks, Gregory Smith, fixed-income analyst at Renaissance Capital in London, said by email Thursday.

“Last year, the government pledged it would be canceling loans and slowing down the accumulation of debt,” he said. “Adding more new loans is only going to aggravate what is already a dire situation.”

A spokesman for the Finance Ministry didn’t respond to an emailed request for comment.

Zambia’s foreign-exchange reserves have plunged from a peak of almost $4 billion in 2015 to $1.4 billion in February as foreign-debt servicing costs soared.

Yields on the country’s $1 billion Eurobonds due in April 2024 jumped 69 basis points to 18.09 percent by 5:31 p.m. in Lusaka.

Foreign debt has more than doubled since 2014, and the cost of servicing it will increase by 90 percent this year, according to Smith.

While analysts including him are concerned about the possibility of default in 2020 and in subsequent years, the government has dismissed these worries, saying that the country has never defaulted before.

“Avoiding default in our view will require canceling some loans, not adding them, plus some combination of an IMF financed program, Chinese debt re-profiling, and a People’s Bank of China credit line,” Smith said.

“Debt sustainability would require a u-turn on most of the loans signed in 2018.”

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  1. She has been insesere and quiet simply put out if her depth as a finance minister.

    It’s a shame the president has accepted mediocrity bluntantly to this extent.



    • Yaba! Even when caught with pants down PF continues to lie. How prepostetous!

      The figure released has been divided by 3 which means the debt for just last year is 3 times what PF lies have declared here – my thought because PF never tell the truth at.

      I have consistently said PF is bunch of thugs looting every penny whether borrowed or not.

      Meanwhile Zambians continue to suffer for the $65 million jet for one Chakolwa Lungu and over $6billion borrowed just last year.

      $6 billion includes rescheduled debt interest , uncleared balance of payment, local debt loans , unpaid salaries, unpaid VAT refunds, Unpaid local government suppliers, unpaid imported fuel and electricity to mention but a few.

    • It’s okay.
      Keep borrowing and borrowing borrowing and borrowing borrowing and borrowing borrowing and borrowing borrowing and borrowing borrowing and borrowing until you’re sick of it.
      Maybe when you’re sick of it, you will realize that you should have borrowed less because quite frankly, if you have a wife that feeds you with T Bone everyday even when you know that you don’t give her that much, you need to worry.
      But since YOU TOLD US SO it’s fine.
      I have been looking for answers on the debt ceiling, but I got it in the article yesterday. Guess what, it’s okay because that threshold has been expanding without real checks and balances. Takes two to tangle. No wonder they fired Felix.
      Let’s roll.

    • There is absolutely no future for majority of Zambians with one Chakolwa Lungu at the helm of power. This I have said consistently since PF came into power.

      PF and one Chakolwa Lungu must go by what ever means necessary.

      How can some one a country in drunken state all day long? Before breakfast Jamesons after breakfast Jamesons, before Lunch Jamesons, after Lunch Jamesons, before supper Jamesons, after supper Jamesons, and lastly before bed Jamesons.

      Such is how Lungu drinks. So what time does he have to think about the country issues.

    • The PhD was done in Ichilungu or I Chibemba? The English is pathetic ba Mushota. How do you get along in Scotland?

    • What have we been telling you? You wont JUNIOR or Senior Citizen commenting on here….I wonder what $275m fro Russia is for …I am sure its for that Nuclear plant they were hell bent to build so they can get their hands on money. These are the most reckless leaders we have ever had I hope not a single one of them ever enjoys retirement.

    • HH is a sadist and privatisation crook who has hidden the privatisation loot in the paradise papers therefore he’s not an alternative for Zambia and furthermore he’s a dictator

    • Because the ..ck sold our assets, just asking.
      Because the fu..’s lazy MPs just walk out of Parley without questioning the debt ceiling raises in the spirit of checks and balances at the ..ck’s direction and instruction.
      Because the .uc. is so devious and more interested in plot 1.
      The f..k ain’t ripe for mature politics.
      But don’t worry, looks like Government has just realized that Moody, Bloomberg and AC will keep attacking as the WB and IMF give then the information. Kekekekeke! ECL will fix it.

  2. We don’t need another comedian

    Ati seven guns and one creseda

    We need someone who doesn’t laugh and dance or the next ten year

  3. Being humble is bad for leadership. What we need is an effective leader. Look were ‘ being humble’ has got us. It means clever people use your humbleness to override your decisions for their personal gain. They continue pushing you to borrow more so they can have more contracts

  4. Ba Fwanya the topic is about the loans which was borrowed from about seven different sources, not the opposition leader. There is no connection between the loans and HH. There was heavily borrowing for infrastructural development.You cannot start building through borrowing only. The money was supposed to be investment into production for domestic consumption and exports. The domestic creates a relief to inflation,exports raise foreign exchange revenue which later be used to settle the debt and partly re-investment in the economy with diversification program. Now part the money went in the pocket other buying the presidential plane .When time came for paying back the printing the currency came in,meal allowance technically removed,about 16 institutions were not paid for some months and…

  5. When time came for paying back the printing the currency came in,meal allowance technically removed,about 16 institutions were not paid for some months and political intimidation from State House increased. Yesterday the European Union Representative to Zambia mentioned the political turmoil been groom by State House which worry the donors and foreign investors except loans. From my explanation where did HH’s if he is a sadist.Even China have known now that the African is a sinkhole or a bottomless pit except Botswana,Angola,Namibia,Ethiopia,all Arabs in North Africa,Rwanda,SA,all islands near like Cape Verde. All these it is HH the sadist to blame.

  6. This Guy President Humble Mutaware, is always described as a good guy.
    I for one don’t doubt that fact, & believe he’s a better human than Kambwili, or Kabimba.
    Also believe he’s a guy who will help those who are in need & close to him,, hence he NEVER sacks anyone despite the gravity of their crimes mainly Violence & Corruption.
    1. This is a Man who warned of having NO Vision, & ZAMBIANS went ahead.
    2. This is A Man who prioritises Clubbing, & Drinking over uplifting Zambia.
    3. This is the Man who had a Widow cry after conning her, & had his license withdrawn.
    4. This is a Man who holds on to Chitotela, & Violent Thugs like Kaizer, & Bowman.
    PRESIDENTIAL MATERIAL HE IS NOT! This debt is a symptom of “Humble Great…

    • Cont;
      This Debt is a symptom of “HUMBLE GREAT, NON PRESIDENTIAL JONA MUTAWARE”!!

  7. Oppenheimer family popularly known “ANGLO AMERICAN ORG.” We understand your EVIL SCHEMES TOWARDS AFRICA SINCE 1917.
    Moody’s ,CA and Bloomberg are tools that have been strategically setup to destabilize Africa inner governance cores.They have bad reputation for African states.As the case of ZAMBIA.
    Kk was harshly ousted of power,he refused to follow their economic ideology on running multinational economic facilities (ZIMCO,INDECO,FINDECO as major)
    Chiluba after being used him ,the same tabloids, Called him CORRUPT ,they destroyed everything about FTJ.From his material life to family life.Today FTJ’s family trail is suffering as underclass.
    The Mwanawasa was picked as daytime darling just after receiving Chinese mine conglomerates in Zambia.They advocated to have him elected as SADC…

    • One sadist parasite feasted on the infamous SAP.
      He masquerads as political leader.
      No chance.

  8. It is beyond reasonable doubt that HH is a tribalist. However, looking at the way things are going, let us just vote for him in 2021

  9. This means sad reading indeed.And where on earth has this money been spent?? US$2.5bn for our economy cannot just go like that and we don’t feel it or see it’s impact!? These guys needed to removed like yesterday,no wonder Trevor Simumba insists this Finance Ministers is NOT up to the job!! No,some one has to explain,we seem to be borrowing from everywhere and yet many projects are incomplete and substandard!!

    • Mr.P Tata you are a dull cadre do you really think if HH had such backup he would have been in the opposition for that long let us be realistic for once let me give you the following points on why I stopped believing such stories.
      1.Why would Anglo America want to back up a guy that has been losing elections for the past 20years would it not be easier to bribe the PF who we already know are corrupt – I don’t think Anglo America are the that stup!d
      2.Anglo America is a gaint company these guys do visibility studies before undertaking any project so why would they pick a Tonga guy when deep down we all know how much Bembas the majority in Zambia hate Tongas which makes it nearly impossible for Tonga guy to be president of Zambia .I don’t think they would spend so much money on an…

  10. HH and Lungu cannot be compared, Lungu borrowed for the country and will for the country but HH stole to fill up his pockets and he is not ready to return.

    • Therefore the former is corrupt and greedy. He is extremely dangerous to communities, societies and the country.
      But borrowing and borrowing and borrowing is bad too seeing that double h sold all the mines (assets) and pocketed the money, makes him an unprosecuted thief worse than a witch, armed robber and a devil himself.
      We will see what 2021 will bring.

    • Two morons with their dull heads in the sand. The issue is the way PF is fcuking up the economy and not HH please! Tell us how this dull a$$hole will fix the problems he creates everyday. HH is not in government! You twits.

  11. They keep borrowing because they want to be seen to be working. They also enrich themselves from those loans from commissions and kickbacks but when it comes to austerity measures and sacrificing when paying back the loans ,it is the poor Zambians to suffer. What a terrible mistake we made of voting this government into power!! Do not base your future on history. Just because Zambia has never defaulted on loan repayment does not mean they will never default

    • No opposition in Zambia. No wonder borrowing is like free falling. No friction, no pull back force, no inernia, no equal and opposite political reaction in Parley just protests in the name of walkouts. If the the ruling party is vision and direction less, the same can be said about the opposition. No leadership in the opposition. Why wouldn’t they borrow? If all we hear is insults and insults from the left. So hold everyone to account. SI pass in parley to raise borrowing thresholds with no inertia whatsoever. Let them keep borrowing.

  12. @Thorn in the Flesh.You have seething resentment for one HH.If you think HH sold the mines why is he not in Jail?Cheap talk.Hatred for HH wont take you anyway.The surest route to failure is some misplaced sense of loyalty and hatred for others because they are not your tribe and not from your own bubble and tribal group think.Be realistic.The country is not doing well since the time of Sata and pf.
    Economically Zambia is a sad story and in a wheel chair yet people like you continue to be sycophants and bootlikers.

  13. Its normal to see the funding efforts there by the minister as she looks to re-balance and retrace her Revenues and expenditures experiences in the period 2019 to 2024

    You have seen her efforts in upping the funding measures in ZRA Good Sales Tax and eventually reduce those exposures with those efforts in increasing the Tax incomes and reduce on excesses to at-least marginally balance her budget in the shorter term to those tolerable international deficits and budget funding methods She can simply close shop she will have to work and focus long-term on what should be done as investments in infrastructure save and make a return for the growth of the income and reinvestment’s

  14. I was watching the minister Present at Interconnect,I think she spoke sense but its like some of the audiences do not understand her REASONING or PLANS and its was good to have been explained to That should continue in her country tours on explanation of the ZRA new Sales Tax
    You will need to see the Budgets estimates and how they will unfold towards 2024 Although Global GDP is an issue to consider and the point of forecast,our deficits as a percentage of GDP will edger smaller than it is now There will be a projected reduction in rising debt levels with increased revenue collections by sales tax by ZRA Most likely most debt commitments will see an increased repayments and…

  15. “Rather at Intercontinental Hotel Lusaka”

    restructuring to reduce miss-matches in revenues and expenditures due to tax transitions to sales tax and overall there will be more fiscal space to meet most of Gov commitments and avoid brinkmanship’s simply calculate honestly your base line projections from now 2019 to 2024 in key economic indicators such as GDP growth rates projections to 2024 and other including what people like here to here Deficit
    Our good number the GDP growth rate is in constant check to ensure it doesn’t slump to make our debt levels which we are struggling to make a risk adjusted return are sustain-ably so before we begin to harvest the beauty of infrastructure investments…

  16. on public good infrastructures and projects
    The GPD will continue rising with growth in income levels at household and firm levels with good effective and efficient tax systems by ZRA like the SALES TAX contrary to One Umutembo
    Sometimes learn to see long-term into what the Minister and others in Government are trying to Do honestly
    Do some baseline projections and if all goes as planned the risk adjusted returns are better for Zambia than no Investments at all on micro and macro economical levels for the regional and global competitive long-term positioning of Zambia

    Thus said its only possible with a BASELINE FORECASTS at the TABLE without loosing the view

  17. You are confusing yourself in talking about ZRA which is merely a tax collector. The changes from VAT to Sales Tax doesn’t mean that will bring economic growth and development. In your story you have failed to mention the economic policy encourage the mushrooming production and manufacturing sectors in a conductive business environment to attract domestic and foreign investments.This will result in price stability,job creation,reducing debt dependence, raise the standard of living and domestically financing some of our infrastructure development .To run the infrastructural development does-not mean excess borrowing from China.No! They billions of dollars were supposed to spent.
    6.Road construction and development

  18. 6.Road construction and development
    7.Research and Development(in relationship to Zambian economic development in other sectors with untapped business opportunities ) with a wide consultation not restricting to PF Secretariat or Cabinet.
    Maintaining long-term Economic and Political policies

  19. Rubbish. Always hiding the light and showing darkness. One would be alarmed about these articles from Bloomberg if they stated that the debt service was affecting economic growth. Debt growing and economy growing is normal. The ratios cancel out. Money should not be kept in reserves to reap Bootlicker Global Awards like under MMD and Levy while roads made transport costs too high-but drastically reduced now, not enough school places, but enough now e.t.c. Life standards are also so much improved now with household wealth increasing. Only those green with envy talk of debt while enjoying its benefits. Also, those that benefitted from workshops and wastages which have been eliminated for debt service complain.

  20. Its Good that the Tax system from VAT to SALES Tax will result in increase in Revenues Real revenues on which the economy will reinvests not like the current VAT system With more money collected more will go towards meeting expenditures that will in turn multiplier the other segments of GDP like Expenditures by Consumers That will result in increased economic activities resulting in real growth in GDP Increased income will result in surpluses that will Go towards reduction of Financing Costs and save to reserve and not to further incur additional commitments

    There as been a growth also in incomes and activities in those sectors you are mentioning both Private and Public Driven and it can…

  21. lead to growth You should also observe and learn that Tax design matters a lot at every stage of the economy matter and in this case design of Value Added Tax as driver of economic Growth in Zambia Matters

  22. Don’t blame PF blame yourselves as you
    Kept voting PF so just wait patiently until
    You think you want to change.For now it’s
    Dununa dance to PF music.

  23. There is no doubt that the bigger picture and point is to Invest sustain-ably so and grow the economy and to priorities the objective of the tax system for local revenue mobilization and mostly but also important continue to control and review the countries spending needs without affecting Growth

    Yes Tax Design matters and in this case Sales Tax will result in incomes much needed for Growth.Without further explanation i leave here for others

  24. Why borrow such colossal sums when multi-national mining firm FQML was slapped a bill of 7.1 Billion USD for tax evasion and there is complete silence from government. Did they pay or not and if not the Post Newspapers was closed for non compliance with regulatory authorities.

  25. Please Finance Minister pay retirees. you promised in Parliament to pay retirees. y the delay dollar is now K13 and going up daily thus kwacha loosing value. invest in retirees now by paying them now.

    • (Continued,,…….)
      2.Anglo America is a gaint company these guys do visibility studies before undertaking any project so why would they pick a Tonga guy when deep down we all know how much Bembas the majority in Zambia hate Tongas which makes it nearly impossible for Tonga guy to be president of Zambia .I don’t think they would spend so much money on an investment that might not yield when there are much cheaper alternative moreover its not like HH will rule forever so why invest in someone for 20 years so they can do bussinues for 5years if the are lucky maybe for 10years mining is a long term venture investment that that does not yield the capital you invest the following day – if I was them I would pick a Bemba guy .
      3. Let’s not Kidd ourselves I know Zambia has copper but it’s…

  26. (Continued…….)
    3. Let’s not Kidd ourselves I know Zambia has copper but it’s nothing compared to the rich Congo copper deposits so why make such a huge expensive investment when our neighbouring country has better copper deposits and because of the already existing confusion would be an easier challenge than Zambia – being a cadre does not mean leaving out your brain think people I rest my case.

  27. Nations and peoples are largely the stories they feed themselves. If they tell themselves stories that are lies, they will suffer the future consequences of those lies. If they tell themselves stories that face their own truths, they will free their histories for future flowerings (i.e. prosperity)..Ben Okri, A Way of Being Free! ..so truth is needed to liberate ourselves from the shackles of growing debt. Denying the truth has serious consequences in posterity!

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