“That’s one area that we really need to put a hand on so that it doesn’t overheat the economy,” Kalyalya said in an interview Wednesday in Washington. “If that happens then all these interest rates we’re talking about will go up very significantly.”
Ballooning debt levels are key to negotiations with the International Monetary Fund.
Earlier this week the Washington-based lender ruled out any substantive talks on a proposed $1.3-billion aid program during its annual meetings and said it saw a high risk of distress due to the pace at which Zambia’s public liabilities are rising.
Africa’s second-largest copper producer, which is counting on a rebound in the metal’s price in international markets for an improvement in its fiscal and growth outlook, had hoped to resume talks on the planned program this month and reach a deal by the end of the year.
Negotiations for an economic-aid package have been underway since April.
“Obviously, you don’t expect the debt to be reduced tomorrow,” Kalyalya said. “What is important is to have a path that brings you to more sustainable levels.”
Zambia’s external debt rose to $7.6 billion by Aug. 31 from $2 billion at the end of 2011 as the government tapped the Eurobond market for $3 billion and borrowed money mainly from China to finance roads.
In an attempt to rein in external borrowing, the government decided to triple its borrowing from the domestic market to 11.2 billion kwacha ($1.2 billion) next year.
Yields on the nation’s $1 billion Eurobond due 2024 have risen 14 basis points since the start of last month. It fell nine basis points to 7.06 percent by 4:58 p.m. in Lusaka on Thursday.
The kwacha weakened 0.1 percent to 9.66 per dollar.
“There is quite a lot of pressure on the domestic side because the external side — the borrowing — that window is kind of closed,” Kalyalya said. “If we maintain within the budget frame, we should be able to manage with reasonable
interest rates.”
Bloomberg
Wrong answer Kalyalya. The correct answer is Zambia must prioritize THEFT management to protect the economy-
That means JAILING the THIEVES. Not paying them for holiday travels around the world from public resources. That will have to be repaid by poor Zambian Taxpayers.
Zambia need to control it’s expenditure and instead increase copper and agric production. GRZ need to start opening new mines in collaboration with local Zambian business instead of leaving mining to foreign investors.
Mmmmm Kalyalya ati Zambians? Bushes nifwebo? You know exactly who the culprits are. Please mwitubikoma. Twakana.
I thought i said it on this forum that the first thing you learn in economics 101 is government borrowing from domestic market increases interest rates…. so PF marketeers started posting cadre economics..
Bane you are in trouble… next year you will see what we used to tell you about these EURO bonds you were so excited about… where is Miles Sampa who was smiling about the Euro bonds???
Prioritize debt management ..really laughable…when they are buying second hand fore trucks for $1million each!!
@ jay jay. What’s a fore truck??
Solola Bye!
* Fire Truck
Just the other day the banks where happy with the budget.
AI is watching us by algorithm.
We haven’t seen nothing yet.
Instead of insulting give solutions accompanied with points. …not just blabbing. If the PF don’t do what you suggested then you can complain.
Really laughable..what advice can you give a thief apart from to stop stealing!!
Kikikikikikiki! Jay jay wandepula we!
Now the new PF moto will be “debt managment” instead of “wealth creation”…..
OK ba poor family (pf) nabacilamo, nafwe ma supporters natulusa hope….
There is nothing wrong with borrowing. What is disheartening is to borrow the money but ends up being stolen by Lung-u and his government. In my opinion the debt problem is very simple. The solution is to stop stealing public money by PF Foo-ls.
Why are we so much in debt? If we answer that then we got ourselves a stating point!!
Indeed nothing wrong with borrowing. The PF applies prudent management to borrowed resources, benefits will be realised by our children believe you me. Zambia will soon be a middle income country.