Friday, June 14, 2024

Zambia to pay less following debt restructuring deal – Musokotwane

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Minister of Finance and National Planning Situmbeko Musokotwane says the debt restructuring agreement will enable the country pay its official creditors US$750 Million for the next ten years compared to the US$ 6.3 billion that was supposed to be repaid in the same period.

Mr Musokotwane says the agreement is a significant debt relief to the country as it will channel some of the resources in different sectors of the economy by embarking on developmental projects and investment programs that will be generating revenue for the country.

He noted that the previous contractual arrangements did not serve well for the country adding that close to 40% reduction of debt burden was recorded as a result of the postponement of repayments and a reduction in interest rates.

The Minister said this in parliament when he gave an official statement on the debt restructuring agreement.

“The postponement of payments through extended maturities will generate about US $5.8 billion in debt service savings over the period 2023-2031. Therefore, Zambia will be paying its official creditors about US $750 million only over the next ten years, compared to about US $6.3 billion that was supposed to be re-paid in the same period, under the previous contractual arrangements.

“In economic terms, or should I say considering the time value of money as described in the IMF’s Debt Sustainability Framework, the agreement delivers close to 40 percent reduction of our debt burden as a result of the postponement of repayments and a reduction in interest rates,” the Minister explained.

Mr Situmbekko added that the agreement with the official creditors has several benefits for the country adding that one of them is that It will generate US$5.8 billion in debt service savings which unlock resources that can be utilized for our developmental programs.

He explained that the agreement will also unlock extra funds from cooperating partners stating that this year both the International Monetary Fund IMF and the World bank will disburse funding to Zambia amounting to US$188.8 million and US$75 million respectively.

Mr Musokotwane said this will result in positive cash flow for the country as opposed to the situation without a debt restructuring agreement in place.

“It is true that debt servicing will resume in three years, the effect of the restructuring reduction in principal payable due to stretching the maturity as well as lower interest rates means that the annual cost for debt servicing will be very low. This means that Zambia will enjoy positive cash flow when one compares the debt outflows versus the debt inflows and the extra cash will be available for development,” Mr Musokotwane noted.

He said the agreement will also provide a pathway to restoring debt sustainability in the medium term, thereby leading to an improved macroeconomic environment in particular the impact on exchange rate stability should be tangible.

Mr Musokotwane further noted that some of the locally issued treasury bonds are bought by non-residents who bring in foreign exchange and that before the restructuring agreement was reached many new investors in the bonds held back their foreign exchange.

He said the government is keen on ensuring that the country should never find itself in a position of unsustainable debt accumulation adding that It is against this background that the Public Debt Management Bill was introduced in parliament which requires the executive arm of government to seek authority to borrow funds from the Legislature through the Annual Borrowing Plan.

“Allow me to express the government’s gratitude to all our official bilateral creditors for the favourable debt restructuring agreement that was reached on 22nd June 2023. Special thanks go to the Co-Chairs, France and China as well as South Africa who were the Vice Chair of the creditor committee. We are also indebted to the Paris Club Secretariat for their unwavering support. I would also like to extend our heartfelt gratitude to the International Monetary Fund and the World Bank that have stood with us during this period, “Mr Musokotwane stated.

46 COMMENTS

    • This debt can be managed within our generation if we work hard and leverage the vast wealth that Zambia possesses ,Stump out corruption and money laundering.It demands limiting consumptive expenditure for productive expenditure.but of course,we will have to deal with people like Deja Foool who shall soon be protesting with a big mouth and small hands.It means hard work.The reasons why creditors are askance at a debt write-off is largely because they see Zambia as a very wealthy nation.They saw the billions that left the country through money laundaring,little women creating banks in their homes, others giving nieces large sums for safe-keeping and still some vagabonds taking selfies sleeping on tons of cash

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    • There is only one tribe in Zambia that has sane people. That tribe is TONGA. Tonga men and women must not marry people from Eastern & Northern Province…….. They are all monkeys and rats….

      The campaign to fire all Bemba and Ngoni people from the civil services is going very well. All new recruits in the Army must come from Southern Province….. We must take back the country…….

    • We have a troll here in the name of Spaka. I doubt it he’s actually even Tonga but he has an agenda to pose as Tonga and use that to create political problems for HH. Even if he is Tonga, he has no right to speak for all Tongas or any tribe for that matter if he’s not Tonga. Whatever the case is, he’s committing a crime under Zambia’s cyber security laws.

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    • Spaka ought to be in the sights of law enforcement officers. Post-colonial states do not fall into instability and conflict in one day. The seeds of conflict are sown slowly by a few misfits. I call upon the security services to unmask this fellow, Spaka.

    • Muzambian…. have some decency. You mean you can’t drive a point without insulting people. You feel Musokotwane is right…. that’s the way you see it. I have reservations on what he’s saying, it’s my opinion and I have the right to do so.
      Now I am beginning to believe what I am hearing that you people want to make your language the national language… I didn’t believe it but going by the way you react, well…

    • They are busy arresting Mwamba and Patel and Zumani Zimba for terrorism and they are failing to arrest this terrorist here called Spaka. Spaka is issuing treasonable statements here. What poor compromised investigative units we have

    • Deja Foool.Retrieve your recent posts and you will find that you insulted Laura Mitti,so shut up dirty underpants

  1. Mr Musokotwane , you owe $6.3billion. You extend the repayment period and start paying $750m Where is the saving of $5billion coming from? Has it been written off? My understanding is that you just postponing the payments Sir. Dont cheat us. There is no saving here.

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    • Paul.
      That is correct. Take into account the following two points:
      1) As this was a framework additional negotiation will be done, which will lead to a reduction in the interest to be paid
      2) “Time value of money as described in the IMF’s Debt Sustainability Framework”, meaning, by 2031. the value will be reduced by 40%
      Disclaimer: The above two points have an impact, but I am not saying they equate to $5billion

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    • The saving is not what you think it is here baba @paul banda.
      Savings in this instance mean, that which was meant to be paid back is now with held and can be ploughed back in country’s investments so that it generates more funds thereby creating favourable and manageable repayments.
      So the onus is now on tonse pamodzi to create secondary and tertiary investment i.e processing of metals,minerals and other resources to finished or ready to use stages. Example, after mining copper, we separate impurities, manufacture copper wires or cables and sell to industry. This process creates employment and taxes.

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    • Paul, by delaying payments that makes $5billion plus on other developments that can generate revenue /income for Zambia! If you owe K60,000 and you make monthly interest payments of say K5,000 and your creditors allow you 3 years of no payments or reduced payments to K800 per month, that frees you up K4200 positive monthly cash flow with you can then reinvest in a Yango car and an Airtel booth that will increase your monthly revenue ! lets all praise HH for this hard work! Yes the debt is still there but its allowed us breathing room.

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    • Dreamers aplenty in Zambia.
      And If this is our Minister of Finance Iam emigrating to Zimbabwe.

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  2. History will judge you for being so cruel to your own grand children. The country has the capacity to pay that debt now. We have lots of copper, lots of Gold, Sujilite , Maganese , cobalt and emaralds. Why not use these now to pay the creditors? You are letting the mining firms taking the money as tax holidays which you are supposed to use to pay the creditors. But you have chosen to punish your future generation to come and be harrassed by the creditors.

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    • This is a failed government , the most miserable government Zambia has ever seen well it is good to try anyone who wants power now we have seen his calibre and no question about it he has proved himself that he cannot perform.
      Talking good English doesn’t mean that you are intelligent English is just another tongue , so to say but what you put in is what speaks for you.
      English language doesn’t make you any thing .

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    • Next generation? UPND dont care about that. One cabinet minister forced Kacasu down the throats of the next generation as the media watched.

  3. Fulfillment of prophecy…the system was created to enslave Africans and to keep them poor…thats the only way the West can dominate Africa and on stealing our wealth….WE DON’T NEED NO PENNIES FROM THE IMF BUT SINCE WE HAVE BANDITS AS LEADERS THE WEST IS ABLE TO CAPITALIZE ON THE CHOLA BOYS AND STEAL OUR WEALTH….HOUSE NEGROEEEE VS FIELD NEGROEEEE….FIELD NEGROEEEE SAYS LETS RUN AWAY AND HOUSE NEGROEEEE SAYS NO LETS STAY…WHATS BETTER THAN OUR MASTER’S BREAD CRUMBS

    • But what has the debt restructuring deal got to do with your “enslave Africans” ranting?
      Be positive for ONCE !! Give credit where it’s due. not just ranting.
      It’s Not Musokotwane or Hakainde who brought enslavement on you?
      Ask yourself, what are YOU as an individual doing, to free your enslaved Africans?

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    • Zambians made a grieve mistake when they voted for this western stodge into power , Zambia has enough resources to pay off the debts , this government is selling our people to financial colonisers right from the time this guy came into power he rushed out to go and borrow more so that he can consolidate the poverty on Zambians .
      This guy is the Zambian enemy number one. As for me I don’t see anything coming up for the improvement of our economy it is just a sad story, during campaigns he was the fixer of what was broken in Zambia today he is a complainer number one.

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  4. Master falls sick…” Boss ‘we’ are sick”
    Master’s house is on fire ” Boss ‘our’ house is on fire” and the house negroee is the first to run and try to put the blaze out risking his own life…( Ukraine mission)

  5. Sometimes it is better to just shut it. You failed to run the mines because in your small brains you thought the cash outlay involved was pocket change. You tried to get the IMF bailout yourselves and failed terribly because your policies where not ideal but bent on thieving. All you PF supporters are pissed because the deal is progressing well for UPND? Busy crying on the resources which you can’t even use to make match sticks or toothpicks and there you are talking rubbish. Let them work in piece and we shall judge at the end of their term.

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    • On point.
      They have nothing to offer.

      The whole Opposition including PF, has one single manifesto at the moment – Fake Human Rights!!
      What they fail to understand is that the ordinary person is pieced off. seeing Ba Pompwee still running on the streets, when they are supposed to be locked up.

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    • No one failed to run the mines you are just proving to us that you are so thick that you have no plan for this nation , when you are in power it is your duty to run the country ever since you came into power all you do is to complain why don’t you just resign since you have no ideas how to solve problems of the country .
      There is no country in this world with out debts , borrowing is not bad because that is how you can develop your country without borrowing you can go no where.
      Zambia has the capacity to pay all that money with all these rich resources , gold sugilite gold and you are failing to collect taxes and failing to take visa fees from white people what a shame etc you can not be crying as if Zambia is poor.

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    • nshilimubemba
      Zambia has been in debt for the past 55 years, those resources were there. Why didn’t LUNGU use those resources to finance the infrastructure? Because it is PF who left the 12billin kongole.

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    • ” You failed to run the mines because in your small brains you thought the cash outlay involved was pocket change.”

      Are these people still claiming intelligence for the English race? 🙂

    • Yours is a reasoned argument. These are supporters of the Chawama drunk who lost the licence to practise law due to his thieving ways who think that they can redeem him and get him re-elected as President of the Republic of Zambia.

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  6. @ General Kanene
    You missing the point here bwana mukubwa…do you know what they call “False hope”…. this is exactly what’s happening to Zambia…Emmanuel Macron is a piece of bulls#$% and a useless Politician….you look at the IMF director (East European)…and the East Europeans hate Africa with a passion and you think they will do anything to help Africa…..Whatever they do its for their best interests so don’t be fooled….but for praise singers you can’t enlighten them

  7. Most on here dont understand high finance or even know how lending institutions work
    No wonder we still struggling 60 yrs down the line
    ILLITERACY !!!

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  8. And for someone to be called an investor in Zambia you have to be a Foreigner and white or Asian….imagine if Dangote was white how they will be treating him…by now they have have given him all our Mines if Dangote was white or Asian but since he is Black African no one looks at him as an investor

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    • And just imagine he doesn’t use Zesco power at his plant… but nobody seems to notice it… unless he was Vedanta.

  9. Minister of Finance and National Planning Situmbeko Musokotwane says the debt restructuring agreement will enable the country pay its official creditors US$750 Million for the next ten years compared to the US$ 6.3 billion that was supposed to be repaid in the same period.”

    So the debt repayments went up – from $630 million a year to $750 million a year.

    How his this ‘debt relief’?

  10. @Spaka, why do you write so much nonsences.
    I do not believe you are a Tonga, but just someone who is trying to create hatred against Tonga’s.
    I would not be surprised you are a PF stooge.
    My challenge to you is “prove you are really a Tonga”
    Tonga’s behave like you.

    • He is not Tonga. He wants to stir hatred between the Tonga and the Bemba and the Ngoni. He thinks he can start Biafra or Rwanda in Zed. LT should ban him. I suspect he is Chilyata who got banned and then returned as Spaka

    • De Javu has posted that “they want to make their language a national language”. Is their one language in the governing party? This misinformation will not go unchallenged. I know the agenda that drives De Javu.

  11. He is not Tonga. He wants to stir hatred between the Tonga and the Bemba and the Ngoni. He thinks he can start Biafra or Rwanda in Zed. LT should ban him. I suspect he is Chilyata who was full of insults and got banned and then returned as Spaka.

    • No he is not. I think law enforcement agencies will fish Spaka out. When HH returned home from France last Saturday, Ngoni Warriors dancers were at KK International Airport to welcome him.

  12. As HH will be officially opening Parliament, Ngoni Warriors dancers will be there to perform. Spaka is free to hate Tongas as much as he wants if that is what makes him happy. But it seems he wants others to join him as he’s lonely in the business of hating.

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