Government, through the Ministry of Finance (MoF), has released K147.8 million statutory expenditure towards the October 2013 debt service obligations.
The treasury also released K15 million in October, 2013, to help dismantle some outstanding domestic arrears owed by Government to various suppliers of goods and services, and a further K11 million for arrears accrued by entities under the Ministry of Youth and Sport.
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Out of the K147.8 million statutory debt service funding released in October 2013, K80.2 million was allocated to multilateral external creditors; K67.5 million was interest payments for the internal debt; and K67.5 million as interest payments on Government bonds and treasury bills.
ZANIS reports that the Secretary to the Treasury, Fredson Yamba, said this in a statement released in Lusaka today by MoF Public Relations Officer, Chileshe Kandeta.
Mr Yamba said Zambia will continue to honour its constitutional and statutory debt obligations in ensuring that the sound macro-economic policy frame and enabling environment which has been created.
Mr Yamba said both local and foreign investments in the country are not eroded by poor statutory debt repayment mode as concerns about the country’s ability to repay loans or debt sustainability are legitimate.
Finance Minister, Alexander Chikwanda, recently announced in parliament that the Patriotic Front (PF) administration is mindful of the debt trap the country experienced before 2005 and the thrust is to watch the debt profile both locally and external.
Mr Chikwanda said external lenders are comfortable to lend to Zambia because they are convinced she has the ability to payback.
He disclosed that International Finance Corporation successfully issued a five-year K150 million bond and these resources are now available to the private sector for investment in the economy.
The minister further explained the donor community approval of loans because of the sound macro-economic policy frame and the enabling environment government has created for both local and foreign Investments.
“The peace and stability that characterize Zambia induce confidence in our economy. We need to put a lot more effort in developing sectors with huge growth potential and if our borrowing targets the growth sectors of economy such as agriculture, energy and tourism it means our debt servicing will be bearable,” Mr Chikwanda said.
The stock of Government’s external debt is estimated to have increased marginally by 1.8 per cent to US$3.13 billion as at 30th September, 2013 from US$3.08 billion last year.
Government as at 30th September, 2013 paid US$90.78 million interest on the current external debt and payment continues.
Its a good progress towards reducing the speculation that was on default risk and position ourselves to renegotiate and align the terms or covenant’s, positioning them against our current strengths in future projected revenue streams and focus’s.This can be done by analyzing the various maturities and yield curves to ensure that the net cost of debt to principal amount is within what is best case and we position and learn the common pricing modules and next time reduce the costs in spreads between the US risk free rate or the German risk free rate in case of the euro and berch mark accordingly.A cost benefit analysis on various funding methods will be helful to free much revenue
@Jonathanmhango Financial Analyst, your writing is pathetic If I were marking a your financial exam paper I wouldn’t waste my time to read further. I will just cross it and give you 1% for turning up. You lack basic communication skills. Everything is disjointed, incoherent and most of all illogical given the top of the article. No one can argue that you have been to a class somewhere but I’m not sure you understood the right way to address your audience in an appropriate language. Ooops! I forgot about copy and paste. Next time don’t waste valuable space on this blog, someone could make better use of it.
Normally when you look at the yield curves on structures done and similary compire with other and down weight the risks in methods of funding taking into consideration the need for liquitidy,there is need to look at the performance of term structures and bench mark them and see what can be learnt
There is need also to grow the local “sovereign Bond Market as it were” as a cheap source of financing in municipals and central Gov. Currently the market is not deep yet we seem to have a lot of monies in private and institutions. Restructure the BOZ bond sector for a common man to invest also not a few in primary and secondary.Look at the auctioning system also see how that reflects on…
raise more money at the same time reducing coupons. Expanding it not only to save and be traded on markets not as a general bond issuance but that can save the sectors.
Unless you establish your own system and make it functional you will always get money at higher yields .A little bit of market sensitization and creation of transparency and efficiency will help to raise interest and therefore the much needed liquid in the area.We need also to reduce dependency on consultancy on Financial services and create capacity within ourselves and institutions meaning that we only consult a little from foreign investments firms and obtain best performance thereby reducing costs.
I have retired LT
I have retired LT my last call is to support people in positions of authority and help them to pause a little and reflect on what they know already and only encourage them to do that which they are doing even better as they endeavor to serve the masses. My observation on your forum is that we are always thinking about a foreign Investor or advisors or financiers or investment firms or rating agencies or economies to shape and determine the shape and direction of our economy without position ourselves as lead initiators and allowing others also to copy and bench mark against us. The same should change in manufacturing were a foreigner is the only investor. be helpf.Lets create business cycles…
When you do like the 30% CEC then you gradually create capacity and fully develop the sectors to sustain them for the feasible,creating capacity and value retention for years to come insulating you from bad decision in exit shocks by many decisions made by pure businessmen in these sectors leaving the country and masses not well-off.
I officially close my participation and thanks for your flexibility and innovation. Its better than the foreign blogs we normally comment on as it gives the local context.
Thanks again I am done and officially close
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at 3.8 billion us dollars debt just two years in PF government, we headed towards HIPC by 2016. Highly indebted poor country is a title that PF sees nothing wrong with. Continue borrowing and paying our salaries. after all, by 2035, some of us would have kicked the bucket.
Please pay retired civil servants their terminal leave benefits and repatriation allowances in full not in piece – meals. Its embarrassing on the part of Govt to fail to pay even K5,000 repatriation allowance to person who retired 10 years ago. Kitwe District has now formed an Association called RETIRED TEACHERS ASSOCIATION OF KITWE where members pay membership fee and the Chairman and the DEBS sit to decide who should get and who shouldn’t get and how much. Non members’ fate cant be written about. I have witnessed a retired person getting K3,000.00 out of K50,000 at the Kitwe DEBS
The external lenders are happy giving us loans because we are able to pay, YES, thats obvious. But the real issue is we pay back that money with interest. Its that interest, the lender’s income and pride thats why they are very ready to way lay by, cool, and then when payment are due, usually long term, that when we the borrowers feel the pintch! Thats why you do not waste borrowed money. Better invest it and get quick returns so that we repay from profit that we make out of it. Do not borrow for careless spending for time of reckoning ever comes. Do not forget HIPIC tag that we had until we were forgiven. We can sell a country by too much borrowing.
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Officially left my brother to share knowledge with wall street boys.Atleast you have taken something.We score A plus consistently.
I have left to concentrate on my studies and work.
See my last comment on the UNZA lecturer. I will not comment further even when deliberately asked to reply.
I promise myself to stick to my ethics this time.