A Turkish company has expressed interest in refinancing Zambia’s $750 million Eurobond falling due in 2022, President Edgar Lungu said on Saturday during talks with Turkey’s President Tayyip Erdogan.
Government, whose credit rating was downgraded by Moody’s on Friday, said in December last year that it would begin refinancing Eurobonds worth a total $3 billion in 2019 to reduce the cost of debt servicing.
During talks in Lusaka with the visiting Turkish president, President Lungu said that the firm would send representatives to Zambia in September to discuss details of refinancing.
“We urge you to take keen interest in this matter and encourage the company to pursue this deal without hesitation,” Lungu told Erdogan during the meeting held at State House, but gave no details about the company that he was referring to.
As well as the $750 million Eurobond, Zambia has a $1 billion Eurobond due in 2024 and another $1.25 billion Eurobond which will be due for repayment in 2027.
Ratings agency Moody’s on Friday downgraded Zambia’s long-term issuer ratings to Caa1 from B3 and maintained a stable outlook, reflecting ongoing fiscal consolidation challenges.
The International Monetary Fund in February rejected Zambia’s borrowing plans, saying they risked making it harder for the southern African country to sustain its debt load.
And President Lungu said Zambia would study how Turkey has managed to develop its economy in its quest to be a middle income country by 2030.
He urged Turkish companies to take advantage of Zambia’s conducive atmosphere and political stability to invest in the country.
“The market for products in Zambia is readily available both locally and abroad because of the country’s central location in the region,” President Lungu emphasized.
The President said in order to boost agriculture, the country had identified a farming block totaling 1,000 hectares of land for livestock farming and fisheries.
He further paid gratitude to Turkey for the role it was playing in promoting peace.
“I know that your country is hosting 3 million refugees especially from Syria at a great cost which is not easy while, Zambia is struggling to host just 73,000 refugees from war torn neighboring countries,” President Lungu said.
He described the state visit by Turkish President as historic, adding that Zambia would take advantage of the visit to enhance collaboration between the two countries.
And Turkish President Recep Tyip Erdogan said that his country could aid Zambia to diversify its economy and achieve the goals of the Seventh National Development Plan (7NDP).
President Erdogan also reiterated Turkey’s commitment to cooperate with Zambia in various economic fields for the benefit of the two countries.
He said Zambia stood out to be a model for the entire continent in the establishment of democratic institutions and peace, adding that by December this year, Turkish airline would start flying direct from Turkey into Zambia.
“We can do a lot together, we can build dams which can provide safe drinking water, energy generation and for agriculture purposes,” President Erdogan said.
And Zambia has signed twelve memorandums of understanding with the Turkish government in various fields that included an agreement which aims to establish the program coordination office of the Turkish Cooperation and Coordination Agency (TIKA), which was signed by Foreign Affairs Minister Joe Malanji.
Others were agreement on mutual obligation of visas for holders of diplomatic passports, agriculture, Fisheries and livestock, promotion and protection of investments, tourism and arts, youth and sport and the field of media.
President Erdogan is the first Turkish President to visit Zambia.