Government has denied media reports that it intends to sell off the debt accrued from the Eurobond to a group of investors also known as vulture funds.
This week, Presidential Adviser Lucky Mulusa told the Post Newspapers that Government has received unsolicited offers from some vulture funds willing to buy off the Eurobond debt at lower interest rates.
But Secretary to the Treasury Fredson Yamba has come to deny the reports saying Government has no plans for any sale of its debt to any investor.
Mr Yamba said the Government is fully committed to the conditions and principles under which the debts were contracted.
He said this means that Government will remain in the international debt market and honour all its obligations as they fall due.
“A testimony to this, is the establishment and operationalisation of the Sinking Fund in the current fiscal year. Government is further, developing a Medium-Term Debt Strategy to ensure that it has a coherent and well-structured way of dealing with debt and its associated risks,” he said.
“In this respect, the assertions by some commentators that this “revelation of offers by Vulture Funds” is a realization by the Zambian government that it was in error to borrower from the commercial capital markets are unfounded and misleading.”
He added, “I wish to reaffirm that borrowing in Zambia is strictly guided by the Loans and Guarantees Authorization Act, Cap 366 of the Laws of Zambia that has set procedures for borrowing and has enshrined authority to borrow on behalf of the Republic in the Minister of Finance. Further, application of such debt has largely been to investment, growth and poverty reduction supporting projects such as those in energy, transport and communications, and social infrastructure namely health and education.”
Mr Yamba said Government is confident that these huge investments will give increased economic activity that in turn gives the country the capacity to repay the debts.
“In this regard, the general public and the international investor community, that has shown confidence in Zambia’s creditworthiness, is assured of Government’s continued commitment to respect the principles under which the debt was issued,” he said.
“The Government also wishes to inform the investor community that it is committed to putting in place a debt strategy that will in a sustainable way support investment in key growth areas such as agriculture, manufacturing, tourism and mining for increased job creation and poverty reduction. The country’s outlook is strong despite the current external and transitory challenges, and we are positive and remain resolute to honoring our debt obligations as they fall due.”
There is no smoke without fire. Government may have toyed with the prospect of putting the Zambian economy at the mercy of vultures.
But Lucky Mulusa, Special Assistant to the President said PF govt was going to sell the debt to voucher funds. I wan to believe Mulusa on this one. Yamba has always been clueless
Smoke without fire. Come on I bet you are one of those few morons that read the Post everyday.
EFYO MWBA LYOSE MULA KANA “BA KOLWE BA SHUMBU MUSHOLOLWA”.
“PA 11/08 MULEYA NI MPAKALITENTE , MPAKALITENTE, MPAKALITENTE, MPAKALITULIKE”.
sort of disorganisation among the patriotes..i hope an array of faithfulness can one day be found in our leaders.As citizens we remain committed to our ideaologies of peace and hope for a better nation so our leaders must step up.
Don’t even think about it.
This clueless clown does not even understand what he is talking about!
The bonds do not belong to Zambia. They belong to the persons that bought them — in other words, the people that lent Zambia the money! So how can they sell them when they do not even own them?
The OWNERS can sell them to anyone they want to — INCLUDING VULTURE FUNDS!!!
PF and this dull Government of Lungu have truly sold Zambia into SLAVERY!
VIVA HH 2016
Ehh kaponyas without education, so easy to make monkeys of.
Lets say zambias bonds are currently trading at a yield of 10% interest. What we are told is that a fund wants to give zambia a new loan at say 4% and zambia uses that money to pay off the old loan where they are being charged 10%
The complete fallacy of this lie can be understood by asking the following question :
Why doesnt the Fund simply go to the open market and but current zambian bonds and then earn the 10% ? Why should they give zambia a new loan at 4% and tell zambia to payoff the 10% loan when the Fund can themselves buy the 10% loan themselves and earn 10% instead of 4%