UPND Leader Hakainde Hichilema has explained how a Fitch/Moody’s downgrade affect mellie meal prices in Zambia.
Standards and Poor’s rating agency on February 21 lowered Zambia’s long-term sovereign credit rating to ‘CCC’ from ‘CCC+’ with negative outlook on account of rising vulnerabilities to debt repayment obligations.
Also lowered was the Transfer and Convertibility (T&C) assessment to ‘CCC’ from ‘CCC+’.
On the downside, S&P Global see’s the copper producer as being vulnerable to nonpayment of upcoming commercial obligations, for which it could depend on favorable financial and economic conditions.
If conditions persist in deterioration the rating agency could revise the rating on Zambia even lower over the next half a year to a full year period.
Below is a full write up…
HOW A FITCH/MOODY’S DOWNGRADE AFFECTS MEALIE MEAL PRICES!
i. Investors reduce their investment due to poor economic returns; jobs & productivity fall.
ii. At the same time, donors lose confidence in Government and stop bringing aid.
iii. Reduced economic activity leads to poor tax revenue returns.
iv. Being unable to tame its spending appetite, Government resorts to borrowing commercially, but lenders (international creditors, banks and others) factor in a risk premium based on the Fitch announcement and increase their interest rates.
v. The more Government borrows to buy fire tenders, Gulfstream jets and ghost houses – instead of supporting FISP, the deeper it gets into the debt hole, having to pay MORE and MORE!
vi. With reduced revenue, poor spending priorities and a huge debt, Government fails to support farmers with FISP and also fails to buy enough strategic food reserves, even in times of drought, looming food shortages and hunger.
vii. Next FOOD SHORTAGES arise and then mealie meal prices skyrocket, hitting K170/ 25 kg bag!
Next time you hear a credit rate DOWNGRADE by Fitch/Moody’s, remember this!
HH
Nonsense
Always politicizing negativity against the country it’s as if they want bad things to happen to us. We reject it in Jesus name. We don’t care what others say about us or how they rate us, we care what God says about us and he has said he will carry us through the flood and the fire because we belong to Jesus and Jesus belongs to us. So I cancel those words in Jesus name Zambia will prosper because God fights for us.
Hehehehehe ……
Ati…….. God will provide jobs and develop Zambia ?
For sure, call national prayers and meal prices will reduce….
Hehehehehe ……..
This has made my Friday….
Fellow citizens, lets wake up and vote for HH in 2021, it is only him who can bring us out of the economic mess we find ourselves in. ECL is nursing hangovers in State House while the rest of Zambia carries on with no leadership.
Am not a fan of HH, but this is spot on analysis.
Of course the ignorant, thoughtless cadres will be shouting that the downgrading is the work of “external forces” pushing for “regime change”.
That is such a lazy, lazy take. The kind that exposes what kind of ignorant, greedy, corrupt minds surround the president. There many times I wonder if the failure of the president is due to being surrounded by liars who are not interested in his wellbeing or that of the country, but rather their only interest is corrupt riches. But most likely its a combination of his own badness and incompetence and the deciept of his advisors.
The biggest losers are the ordinary zambians on the street.
H.H. NEVER FEAR THE HARSH SPOKEN BY YOUR THE PEOPLE AROUND YOU.
WINNERS NEVER QUIT AND QUITERS NEVER WIN.
GOD SHALL REMOVE THEM ONE BY ONE LIKE ROTTEN MANGOES DROPPING FROM THE TREE.
THIS CHAP IS VERY DULL, INSTEAD OF CHOOSING A VICE PRESIDENT CUM RUNNING-MATE HES TALKING NONSENSE. DEEP DOWN HOS DULL BRAIN HE THINKS THIS WHAT WILL BRING VOTES. YOU WONT CHEAT THIS TIME WITH RIGGED VOTES IN SOUTHERN AND WESTERN PROVINCES LIKE YOU DID IN 2016, A NEW VOTER’S REGISTER IS GOING TO BE DONE SOON, AND STRICTLY THERE WILL BE NO REGISTRATION OF UNDER-AGE AND DOUBLE REGISTRATION. SECURITY WILL BE TIGHTENED THE WHOLE OF THESE TWO PROVINCES. KAMPYONGO HAS ALREADY SENT WARNING THAT ANYBODY FOUND REGISTERING UNDER AGE CHILDREN AS VOTERS WILL BE ARRESTED. SO THOSE WHO WANT TO END IN PRISON FOR TRYING TO FAVOR A PERPETUAL LOSER SHOULD TRY IT.
MR. PATRIOTIC ZAMBIAN, WHERE ARE ZAMBIANS SLEEPING WERE YOU WANT THEM TO WAKE UP FROM. ZAMBIANS ALREADY KNOW WHATS GOOD FOR THEM. HICHILEMA IS NOT GOOD ENOUGH TO RULE ZAMBIA BECAUSE HE HAS ALREADY EXHIBITED DICTATORIAL STANDARDS AND TRIBAL IN UPND. WE ARE GOING TO VOTE BACK EDGAR IN 2021 WHETHER YOU LIKE IT OR NOT. THE WAY HICHILEMA ROSE TO POWER ALSO GIVES MOST OF US ZAMBIANS A BIG SCARE! IT WAS AFTER SEJANI DECLARED “ONLY A TONGA CAN LEAD UPND”, AND THROUGH OUT THE LIKES OF BOB SICHINGA, PATRICK CHISANGA ETC. WE FEAR IF HH BECAME PRESIDENT, SEJANI WILL DECLARE “ONLY A TONGA CAN LEAD ZAMBIA!”. SO ADVISE YOUR HH THAT HE WILL NEVER WIN ANY ELECTION IN ZAMBIA BECAUSE HES CURRENTLY THE WORST PERSON AMONG ALL THOSE VYING FOR REPUBLICAN PRESIDENCY 2021 RIGHT NOW. AFTER ALL, THE DEVIL YOU…
If this is the sort of shallow analysis the so called ‘Economic Manager’ can provide then he’s not fit to run a newspaper stall. But knowing our useless online media he might have not even written this. As usual his worshipers will see a lot of sense in this garbage.
I have done Advanced Financial management and understand the impact of the downgrade….. The analysis is correct.
Our vision 2030 to be a middle income may not be achieved……The pillars of the Seventh National Development Plan may not be met….. Nothing political………Poverty reduction may be minimal or unachievable.
Why should analysis inlcude donor aid?Doe it mean all country receive donor aid?Shallow analysis.
please bring back the money
@Manda: Are you normal? I think you need to be quarantied in a mental hospital.
I meant quarantined in a mental hospital.
H.H. NEVER FEAR THE HARSH WORDS SPOKEN BY YOUR THE PEOPLE AROUND YOU. THEY ARE CREATING SHAME AND BURNING IN THEIR OWN HEARTS.
WINNERS NEVER QUIT AND QUITERS NEVER WIN.
GOD SHALL REMOVE THEM ONE BY ONE LIKE ROTTEN MANGOES DROPPING FROM THE TREE.
ise bosa punzira kindly make us understand this thing please!!
Ni opportunism iyi ba HH. Offer solutions
You will see how his fellow tongas will praise him.
Text book economics
Kkkkkkk Tongas are brain dead
Ba HH Laymen can’t understand those economic jargons you saying. Put in simple terms that people can easily understand. Simplify your message to something like this? Say a person earns k2,000 for his work and has borrowed a loan from which he pays k500 back monthly to avoid interest accumulating, his monthly home and other expenses amount to k1,700 and he needs to save k500 in 5 months to do a project that will earn him k2000 so how does that person manage to meet his goals because his income is overrun by k700? Firstly he has to find a way to reduce his k1,700 expenses to k1,300 e.g rent a smaller house, cut on unnecessary expenses etc.that will save him k400 to fully cover his loan and save k100 towards raising the investment he needs for his project. It’s easy for people to…
Contd: It’s easy for people to understand your message this way may your PR teak change their strategy.
Popolyongo, Ma Junky , Mr.PÂ
Because he is not talking of borrowing and stealing ??
Akainde should be the last person to talk about jib loses. How many people lost Jobs and died because of him? How many millions did he make after sending people to their graves?
On these useless Ratings agencies, where they not in court for lying about their rates? Wake up Zambians this man is no good and can turn this country in hell fire. By the way I read mumpanshya commission of inquiry on ZR and it has shocking revelations. Vote for Akainde at your own peril. He used GBM and failed and now he wants to try the verbal diarrhea chap with half brain. Meanwhile no one complains of being sidelined, all they want is instruments of power and the trouble will surely begin. Nalanda, epompele.
Anything foreign is good for HH. He did not have a problem selling the mines. These are the people that sold there brothers fro salves. Africa needs African solutions.
Please someone tell this man that only us Zambians will build or destroy this nation. Why can’t you have your own original ideas? It’s either FBI, that..,Scotland yard this, international community that. When are you ever going to be original? Moody are a mouthpiece of the oppressors just like the IMF and co. Who are you kidding?
You got my vote this time Hakainde…at least for the 1st term.
@Mr. P. They are already supporting him and voting down any sensible comment en-mass. They will support any trash their little god regurgitates. They are a cult and nothing more.
The damned are his acts.
The dented are his moral uprightness.
The dullest are his followers.
The dumbest are his guts.
The dummiest are his political acumen.
If your a smart economist kid, you would offered alternative advice against te sale of our mines, our assets, our life line but no; just like them you chose your thieving behavior; like them, you chose your interests over Zambia’s interests.
How in God’s name would you today stand on your paws and pretend to lecture to us on the economy you helped murder, you corrupt deceased rhinoceros pizzled nigga?
Why not just plainly say defaulting on loans will cause negative ratings and negative ratings will make it hard to obtain further loans should need arise and the lack of capital injection into an ailing economy will drive prices up as people and companies struggle to keep up with rising costs.
Kitchen table matters are more worrying to every Zambian home and the more the explanations in simpler terms that the average toiling Zambian hustling each day to bring something in the home, the more Zambians will be armed with information to use when choosing leaders! I have followed HH’s analyses as he tries to break down issues to benefit understanding among many Zambians. These are the messages and interpretations that the followers of HH need to share continuously with the citizenry. Retorting with insults than raising points of divergence is not seriousness but wasted educational effort!
Over the last few years HH has offered solutions. These have been glossed over by most PF govt. and supporter dunderheads who can not read properly, comprehend or analyze. That is why in their myopia, they keep asking ‘what are the solutions’? No point in explaining them again as they simply pass over your heads. In any case, HH is not in govt. to implement them.
This one is a boy?
Although there is some truth to what HH has stated here, there is, however, quite a bit of exaggeration in what a BOND CREDIT RATING is or supposed to do. Maybe WIKIPEDIA can help us understand what a credit rating is:
“In investment, the bond credit rating represents the credit worthiness of corporate or government bonds. It is not the same as an individual’s credit score. The ratings are published by credit rating agencies and used by investment professionals to assess the likelihood the debt will be repaid.”
SO, WHERE DOES “AID” COME IN IN THIS DEFINITION? This is the reason why exaggerations are unnecessary and in the end defeats the purpose. Nonetheless, HH is right by stating that investments (MOSTLY IN GOVT ISSUED SECURITIES/BONDS) become depressed with a weak bond…
Continue….
rating. That’s true!
Also borrowing (if the Govt is ‘lucky’ to even find a willing lender in the money markets) become very expensive or impossible. The reason being that since Govts mainly raise/borrow money by issuing Govt bonds/securities, interest rates to repay the bonds when they mature simply become prohibitively too high due to “credit risk assessment” charges/penalties that commonly accompany low rated bond issuers. “RISK” in this case simply refers to the risk of default by the issuer.
AND HH SHOULD HAVE LEFT THE DISCUSSION AT THAT WITHOUT ALL THE UNNECESSARY AND IRRELEVANT ISSUES HE HAS LOOPED INTO THIS IMPORTANT NATIONAL DISCOURSE.
By the way, these credit ratings agencies are without controversy: “Until the early 1970s, bond credit ratings…
Continue….
agencies were paid for their work by investors who wanted impartial information on the credit worthiness of securities issuers and their particular offerings. Starting in the early 1970s, the “Big Three” ratings agencies (S&P, Moody’s, and Fitch) began to receive payment for their work by the securities issuers for whom they issue those ratings, which has led to charges that these ratings agencies can no longer always be impartial when issuing ratings for those securities issuers. Securities issuers have been accused of “shopping” for the best ratings from these three ratings agencies, in order to attract investors, until at least one of the agencies delivers favorable ratings. This arrangement has been cited as one of the primary causes of the subprime mortgage…
Continue….
crisis (which began in 2007)…..Other countries are beginning to mull the creation of domestic credit ratings agencies to challenge the dominance of the “Big Three” — Fitch Ratings, Moody’s and S&P (controlling approximately 95% of the ratings business.) For example in Russia, where a new [bond credit rating agency] was founded in 2016.”
SO, IT IS VITAL THAT PEOPLE LIKE HH INTERPRET AND SPREAD SUCH INFORMATION/RATINGS CORRECTLY AND INTO ITS CORRECT PERSPECTIVE WITHOUT PUTTING A POLITICAL SPIN TO IT. ESPECIALLY THAT HE CLAIMS TO BE AN ECONOMIST. PEOPLE ARE LOOKING TO INDIVIDUALS LIKE HIM TO LEARN AND BE EDUCATED. NO NEED TO EXAGGERATE OR LIE!