Finance Minister Margaret Mwanakatwe with President Lungu
Finance Minister Margaret Mwanakatwe
with President Lungu

Bollomberg this week reported that President Edgar Lungu said Zambia whose Eurobonds are trading at distressed levels, is able to repay its debts and will soon emerge from an economic slump.

“Zambia is not in a position of a crisis,” President Lungu said in an interview in Maputo, Mozambique’s capital, on Wednesday.

“When you find that you are being strangled by debt, you hold back and see how you can realign your position so that in the end you continue being alive, you don’t suffocate. That’s where we are now.”

President Lungu’s government is trying to revive an economy that the International Monetary Fund says is growing at the slowest pace in more than two decades, after a slump in the price of copper, Zambia’s main export, over the past year.

A drought has also lowered water levels at hydro plants and caused power shortages.

Spreads on Zambia’s dollar bonds hit 2,000 basis points above U.S. Treasuries last month as investors fretted about its ability to pay off debts.

It’s the only country in the Bloomberg Barclays Emerging Markets USD Sovereign Bond Index, which includes 75 nations, whose securities have lost money in 2019.

President Lungu, who faces re-election in two years, said that while his administration had not frozen new loans, it would prioritize concessional borrowing that comes with lower interest rates.

“We have realized where we are and I think we have taken measures,” he said. “Those measures will see us get some breathing space so that the economy begins growing again. In a few years, we will see Zambia boomerang and rise again to that growth rate which is acceptable.”

Bloomberg

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31 COMMENTS

  1. “When you find you’re being strangled by debt”….there you go Lungu you have just contradicted yourself.

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    • ECL, please elaborate how Zambia will get out of this financial crisis created by you and your PF GRZ?

      God bless Zambia.

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    • Ba LT please, what is “Bollomberg ” and since when?
      Moreover, this article is written in an incoherent manner.
      Droughts…Spreads…then you bring us back to the measures that ECL is referring to in the third paragraph.
      Yet blogger will start reacting after reading paragraph 3.

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    • 1. Bank Of Reserves being used to repay debts
      2. Civil servants salaries being used to repay debts
      Nothing to worry about

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    • Lecturers and other civil servants have not been paid for 7 months he is there spewing nonsense …there are some workers according to an MP this week being paid in Pamelas 12.5 kg bags of maize when they have not been paid for 5 months and the Veep is defending her govt.

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    • The mother fcker Lungu doesnt even know what has driven the Kwacha exchange rate to major currencies down but he says there is no crisis!! Is this idyot same or living in utopia?
      If the UPND cannot toss this fella out, the Economy will push him overboard!

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    • How did Zambia end up with such dull and stupid leader?
      Dullness and intelligence are not measured by your academic achievement or lack of it. They are measured by how quick an individual is able to analyse info and act in way to avoid being at a loss. This is a universal definition of intelligence. If you can not analyse info quickly and act intime to avoid a loss then you are dull like Lungu.
      Millions of people out there are intelligent despite not having formal education.

      HH is damn intelligent! I end here.

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  2. ‘It’s the only country in the Bloomberg Barclays Emerging Markets USD Sovereign Bond Index, which includes 75 nations, whose securities have lost money in 2019.’

    Mr President tell the Finance Minister and her Debt Management Team to up and/or double their efforts otherwise its a worry.

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  3. UNZA needs to quickly confer the doctorate. Maybe our vision can be restored to “see” the debt crisis!
    All seems well when you are enjoying free tax money. The ordinary citizen is the one who is feeling the pinch, especially when fuel prices go up not long from now. The Dollar Kwacha crisis has pushed most prices up! Cement which was selling as low as K48 last week is now selling between K58 and K65 and someone says it’s okay? You have to be a thief to be very successful in this our economic environment! Many companies like Zambeef have just posted their biggest losses first half of 2019, not a good sign! Don’t do politics with debt bakateka! Don’t say some of these things in the ears of your creditors or they will squeeze you further! It’s enough to just say we are aware of the…

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  4. It’s enough to just say we are aware of the situation and are working around the clock to address the issues and reduce our debt exposure as a nation! That’s how a Diplomatic person would put it. Our President’s lack of Political Diplomacy is what is messing up our Economic Environment, creating a lot of Uncertainties in the economy! Uncertainty is the greatest enemy of Economics!

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  5. ECL has just admitted that Zambia has been strangled by Debt. ECL hopes to solve the Debt issue by Converting the Chinese Debt into Equity. That is KCM is being sold to the Chinese by Force. Vedanta is being kicked out of KCM to facilitate the Chinese takeover of KCM. This might backfire if Vedanta puts up a legal fight thru International Arbitration. Zambia will pay hefty damages and compensation on this KCM Hostile Takeover.

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  6. Honestly $10billion debt is nothing for a country

    One man Dangoke can donate that amount to Zambia. Even hh can pay off Zambian debt

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  7. What I find wrong is abuse of this money.

    Can anyone tell vus how euro bond was spent.

    It simply went into pf cadres pockets

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  8. Can the president tell us how we can get
    Out of this suffocation. May be try Nigerian prophet for a miracle?Or bring a
    Top sportsman like Messi to invest in zambia?

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  9. His Excellency is right after all we ARE a Christian nation. We are not allowed to take advice from Fortune Tellers/Crystal ball Gazers, Gamblers (IMF, Moody’s, spread betters).

    In God We Trust. We hope the govt has got the right prophetic word!

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    • If the prognosis, from IMF Moody’s is:
      Low copper prices (the markets will rise again).
      Drought (USA please rejoin climate’ agreement), Rains will come soon
      Conflict with Copper Producer/s (Vedantas’ on way out, the others OWE US higher taxes)

      This is nothing more than negative propaganda promoting Western interests..

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  10. That’s it mr president, we are very much aware, we are praying for you and your ministers. Just work hard for us.

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  11. He’s not the one feeling the pinch of this high indebtedness.No wonder he is saying this.He is ‘swimming’ in the luxuries of state house

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  12. Fellow countrymen and women, we are in big trouble with a government that is sleepwalking us into debt slavery. Lungu will be in Swaziland when all goes wrong.

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  13. ”We realize were we are and I THINK we have taken measures”
    What measures have they taken? This guy is in denial. The first step in solving any problem is to recognise and accept that a problem exists. There is no evidence of this but more appetite for borrowing as he said that they have not frozen new loans and will still contract concessional loans with lower rates. What good at this stage are loans with lower rates?

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  14. We are not prophets of doom, we only say what is obvious.

    Unfortunately it is people’s lives lungu has gambled away and his pf rats on LT don’t want to realise the obvious.

    The worst is yet to come.
    Zambia has not yet started paying back the eurobonds and drought and the trump factor will impact worse than now.

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  15. A little bit embarrassing, I think. What do trib.als think?
    Now this bloomberg, they are given all the information about Zambia’s economic situation, uuuhhmm they seem to know that His Excellency MR Lungu only talks and reveals when he travels abroad. But now us citizens, His Excellency does not even give us achance to ask him questions about our own economy. Does he want us all 16million to follow him to Maputo where we can ask?

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  16. Look at Mwanakatwe’s claws, is this not a classic Lammergeyer vulture we are talking about here! And Lungu’s mouth, it bears a cunning semblance to the genitalia of a female baboon. I’m sure it’s the rats these “Malawians” are chewing everyday!

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  17. Why is it unfounded, is it because part of the China Debt will be Debt swapped with KCM? kindly educate me

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