Government has contracted a total of eight external loans amounting to over US$110Â million from the time Zambia reached the Highly Indebted Poor Countries (HIPC) completion point, Finance and National Planning minister Ng’andu Magande has disclosed.
Mr. Magande said three of these loans were contracted in 2005 while five were
contracted in 2006.
He said government was now cautious in its borrowing, saying it would be contracting
loans which were concessional in nature.
Mr Magande told parliament in Lusaka today that ever since the country attained the
Highly Indebted Poor Countries (HIPC) completion point and had a huge share of her
external debt written off, government has borrowed over US$ 110 million.
He was responding to a question raised by Lukulu East Member of Parliament, Batuke
Imenda (ULP) who wanted to know how much external borrowing and local borrowing
Zambia has incurred since she attained the HIPC completion point in 2005.
The minister said the government borrowed the US$13.8 million and US$ 10.3 million
from the International Fund for Agriculture Development (IFAD) for rural finance
and smallholder livestock development respectively.
Mr. Magande said US$985,000 from the government of Belgium was meant for upgrading the Mapepe ZESCO substation and US$6.2 million from the Chinese government was borrowed for the capitalisation of the Tanzania-Zambia Railway, TAZARA.
He added that three loans were contracted from the World Bank in the amounts of US$
19.7 million, US$29.7 million, and US$22.6 million for malaria booster project,
public service management support and water sector performance improvement.
He said another loan was contracted from the Arab Bank amounting to US$6.8 million
for the water project, making a total of US$ 110 million received after the HIPC
completion point in 2005.
He said as at December 2006, Zambia had remained with only US$643.4 million after
US$6.6 billion was cancelled by the external financial institutions and other
donors.
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Of the US$ 643.42 million external debt stock, US$88 million was owed to the African
Development Bank (ADB/ADF), US$114 million was owed to the world Bank while others were owed US$156 million.
Mr. Magande said the country still owed the Paris Club and Non-Paris club were owed
US$ 6.7 million and US$279 million respectively.
On local borrowing, Mr. Magande told parliament that government contracted through
treasury bills and bonds a total of K7.3 trillion under the same period.
“From the time of attaining the HIPC completion point in April 2005 to December
2006, a total of K7, 359.87 billion worth of government securities matured and were
rolled over,” he said.
He added that the total treasury bills amounted to K6,012.64Â billion while
government bonds amounted to K1,347.23 billion out of which K1,445.40 billion was
paid as interest cost on the matured government securities.
Iam confused with figures, securities, borrowing, debt cancelling, bonds, HIPC where to Zambia? Some is saying trillions cannot be accounted for. The other one is say Billions are not used lying in govt coffers. Someone is stealing Millions which Zambians?
Ba Easy, worry not comrade.I must admit Magande (whom i hold in high regard) just gave us a snapshot of the state of our liabilities.Quite a simple presentation and possibly a first for a Finance Minister!!Now you know who and what you owe.As citizens we must remember these figures and compare them to when LPM is leaving.The figures do show that we have not gone on a “borrowing spree” after the debt cancellation.Hopefully this shows we must be doing something right!!
#Pundit its unfortunate that only u and me discuss this issue though its is of great interest. What is lacking is maybe these comparison you be done with the budget. Compare how the budget was in 2003, 2004, 2005 and from there we can see how the money was used. In my studies I have done finances especially on liabilities, bonds, securitization, Risk Management as well as as a whole Banking.
We needed to know the interest terms of these loans!
But I think the most interesting piece from this story is about govt figuring out what to do with all the money that’s lying idle in commercial banks. Banks are profiteering from lending to Govt at high bond rates which they keep rolling over, rather than lend to individuals. I support the stance of Caleb Fundanga and the Secretary of the Treasury that banks should develop different products and look for customers elsewhere in the economy. But they have no incentive to do this as the payoffs are low.
Francis(4), baEasy(3) has studied banking….maybe he can tell us the significance of the credit referencing agency on retail banking!! I eagerly await his usual detailed response!!
We never had a Finance Monister(sorry, Minister) like Magande. We are getting deep into debt again, billions of kwacha lying idle in local banks, misapproppriation by controlling officers on a large scale and his own ministry cannot account for trillions.He still has that mystical grin and says “I have arrived”, yes, he has arrived in hell!