by Mukosha Funga on 25 May 2018by Mirriam Chabala on 25 May 2018by Abraham Kalito on 25 May 2018by Zondiwe Mbewe on 25 May 2018
- Goal Diggers
by Mazuba Muleya on 24 May 2018by Abraham Kalito on 17 Apr 2018by Abraham Kalito on 10 Apr 2018by Mazuba Muleya on 20 Feb 2018
by Abraham Kalito on 24 May 2018by Stuart Lisulo on 24 May 2018by Stuart Lisulo on 23 May 2018by Mirriam Chabala on 23 May 2018
by Zondiwe Mbewe on 25 May 2018by Zondiwe Mbewe on 24 May 2018by Zondiwe Mbewe on 24 May 2018by Zondiwe Mbewe on 24 May 2018
- Editor's Choice
by Chibamba Kanyama on 25 May 2018by Diggers Correspondent on 18 May 2018by Nevers Mumba on 26 Apr 2018by Anand Rajaram and Miljan Sladoje on 4 Apr 2018
by Diggers Editor on 24 May 2018by Diggers Editor on 23 May 2018by Diggers Editor on 22 May 2018by Diggers Editor on 19 May 2018
by Sipilisiwe Ncube on 24 May 2018by Sipilisiwe Ncube on 15 May 2018by Felix Kashweka on 14 May 2018by Thomas Mulenga on 7 May 2018
- Guest Diggers
by Kalaki on 24 May 2018by Sishuwa Sishuwa on 21 May 2018by Chibamba Kanyama on 16 May 2018by Sishuwa Sishuwa on 14 May 2018
Zambia’s ‘unknown’ debt faces ScrutinyBy Matthew Hill and Taonga Clifford Mitimingi on 10 Apr 2018
Zambia is facing tough questions over its foreign-debt levels from investors who think the real number may be more than double what the government says it is.
Lenders including Nomura Holdings Inc. believe the state hasn’t come completely clean on how much external borrowing it’s undertaken. This is raising concern the southern African nation may be headed for a similar situation to neighboring Mozambique, where hidden debts led to default and the government is seeking to restructure.
“Zambia is in somewhat of a serious predicament of having politically connected additional ‘unknown’ loans,” Peter Attard Montalto, head of emerging Europe, Middle East and Africa economics at Nomura International in London, said in an emailed note March 27. “The hidden-loan problem, in our view, is likely one of short-term external debt that is at least as big as known external loans and external bonds combined.”
For Zambia, Africa’s second-biggest copper producer, external debt is key. It’s been the main stumbling block in sealing a $1.3 billion loan from the International Monetary Fund it needs to bolster foreign-exchange reserves that fell to a seven-year low in November. The government has been on an infrastructure-spending spree over the past five years. That’s seen external loans soar to $8.7 billion at the end of December from $2 billion in 2011.
To read more on Zambia’s debt plans for this year, click here
Already, it’s feeling the strain. The government wants to restructure Chinese state-backed loans, and now also wants to “reprofile” the $3 billion in Eurobonds it borrowed between 2012 and 2015, Finance Minister Margaret Mwanakatwe told reporters Friday in Lusaka, the capital. Her department will in two weeks complete a detailed debt-sustainability exercise, she said.
“Only government knows its level of debt, and government then shares that with the public,” Mwanakatwe said when asked about speculation that Zambia’s debt may be higher than what government said it is. “I’ll be doing that on a quarterly basis.”
Even then, the state doesn’t seem to be so sure. At Friday’s briefing, Mwanakatwe originally said the external-debt figure was $8.9 billion then later corrected it to $8.7 billion. And in June, her predecessor, Felix Mutati, told parliament it had increased to $17.2 billion — he later corrected himself, saying the actual figure was $10 billion lower.
The rapid increase in external debt has put Zambia at high risk of debt distress, the IMF said in October. The bulk of new loans, besides the Eurobonds, has come from China and is going toward building new infrastructure including roads and airports. Contractor-financed projects with no clear tendering processes increased their costs, according to the African Development Bank.
The IMF has requested that Zambia’s government undertakes an independent audit of its foreign debt, according to Attard Montalto. Alfredo Baldini, the fund’s resident representative in Lusaka, didn’t immediately respond to emailed questions.
Still, there is no concrete proof that Zambia has “unknown” loans, Gregory Smith, a sovereign-debt strategist at Renaissance Capital in London, said in a note to clients Thursday.
“Since Mozambique’s hidden debts became apparent, there has been concern about where else this might happen,” said Smith, who previously was an economist with the World Bank in Lusaka. “Zambia has been singled out as a potential source of hidden debt. But there is no hard evidence to suggest the probability is higher there than for other sovereigns of similar credit ratings.”
Mwanakatwe, who was named finance minister in February, will meet with investors in London later this month and will hold a non-deal roadshow in May.Related Items
Subscribe for email alerts
Weekly Most Digged
ArchivesJun0 PostsJul0 PostsAug0 PostsSep0 PostsOct0 PostsNov0 PostsDec0 Posts
- May 2018
- April 2018
- March 2018
- February 2018
- January 2018
- December 2017
- November 2017
- October 2017
- September 2017
- August 2017
- July 2017
- June 2017
- May 2017
- April 2017
- March 2017
- February 2017
- January 2017
- December 2016
- November 2016
- October 2016
The News Diggers
Plot No. Lus/9812/649-MC8
off Alex Chola Road
P.O. Box 32147
Telephone or WhatsApp:
+26-097-7708285, 095-3424603, 096-5815078
diggers [at] diggers [dot] news
editor [at] diggers [dot] news
Send this to a friend