Zambia’s Ministry of Finance is raising a new $250 million syndicated loan as more African countries, including Tanzania, turn to the loan market for financing, bankers said on Wednesday.
Zambia’s loan, its first in nearly 30 years, is being arranged by Standard Chartered and Citigroup and is expected to sign this month with a group of local and international lenders, the bankers said.
Syndicated loans for African sovereign borrowers have been rare. Kenya re-opened the market in August 2012 with a $600 million two-year loan.
The new $250 million loan is Zambia’s first syndicated facility since 1984, one of the bankers said.
Tanzania has also sent out a request for a loan of between $200 million-$700 million, the bankers said.
“The Government of Kenya opened the floodgates last year with its loan. Now there are a number of discussions going on with African countries including Tanzania,” the second banker said.
Tanzania’s Ministry of Finance was not immediately available to comment. Zambia’s Ministry of Finance was not available to comment.
Zambia initially considered raising money in the bond market, but opted to approach banks for a loan after recent bond market volatility, the bankers said.
“If the bond market doesn’t open soon there will be more demand for these (sovereign) loans,” a second banker said.
Kenya’s $600 million two-year syndicated loan was a bridge loan to the bond market. The bond has however been delayed due to the Kenyan elections.
“A bond is still on the horizon but not expected to be done until early next year,” the first banker said.
[Reuters]
I don’t understand these issue well probably because of the word “LOAN”
the word does not excite me at all and the only word I like is saving or investing.
This is why RB wept when he left statehouse.He saw all the money he managed to save in 3 years being wiped put by these Kaponyas we voted for and they have the freaking audacity to borrow more? I don’t see manufacturing industries coming up all we are doing is consuming consuming and some more! All I see is a non functional President,a gallivanting first lady, and ministers enjoying boat cruises and dinners! This must come to an end before its to late! I pass my vote of No confidence!
Debt debt and more debt……. What are our children going to inherit. 90days crap…..
Zambia you experimented at the wrong time. We need competency an.. d not charismatic…
Michael Sata lifotini, a person with a fake degree what does he understand about money supply and debt- watch this page, Sata will begin printing money very soon. The sad part this money is meant for the pay increments of civil servants , but for how long.
As long as my boys don’t grow up to be Arsenal fans , I couldn’t care less.
There was a syndicated loan arranged by a consortium of locally based banks in 1993. LT need to do proper research before publishing stories.
Since they will probably be out of office by then these people care less about the debt burden that shall be left on the nation’s shoulders. If we are not careful our stock of debt will quickly grow to the level of the Kaunda days.
Miles Sampa should never have been in the Finance ministry. He doesn’t understand that America’s best practices are not Zambia’s best practices. $20,000 leadership certificate cannot save Zambia.
Confirmed. We are surely going the Zimbabwean way FULLSTOP
This is preposterous.Pf is sinking our economy faster than the Titanic.Are ministers allowed to sell our country into economic slavery without approval from the Zambian people?I do not remember my MP articulating this to our constituency neither do I recall the minister of finance explaining this to us.This calls for an emergency change in constitutional powers vested in the executive! Opposition leaders where are you?
the country is on her knees. where are we going?
Well, well loans are good if used productively, sensibly, prudently or profitably. A loan that pays principal and interest for itself is good. But loans to feed consumption worse still careless consumption can be a manace in due course. Debt can be so demeaning, so enslaving and so draining of the pocket or is it govt coffers. Yes we can borrow, why not? But plan well the use to which that loan is put. Many expenses are bottomless pits, eg, serminars! We now know so much borrowed, we await how sensible that cash will spent.
Ba @Floyd.
These guys are borrowing for consumption – to meet the wage bill for civil servants.
By the way. Where is the money saved from SUBSIDIES going?
These liars told us that Zambia had a lot of resources but were poorly managed by the MMD they once led but why have they resorted to borrowing at the expense of the future generation? Why are they taking mother Zambia into yet another debt trap? Sata we know u are an old sick man quickly rushing to the grave but remember you have those little ones that will suffer in future. Pliz dont put us in trouble with these tu ma loan in order to fulfil yo failed promises.
Another debt trap beckoning? We hear that the Country has now a total debt of US$3.5 billion. The loan is already half of what the Mwanawasa/Magande financial team fought to clear. Now this Government is taking us back to the debt slavery! How shameful it is that this Regime is governing on nkongole, likoloti, kaloba! They even boast about obtaining loans when they fail to collect equitable taxes from internal sources such as the informal sector!
It is sad indeed. They are borrowing for consumption. We also still have LapGreen to pay and so many new districts to build at once. PF had no plan on how to run this country.
Our children and grandchildren will suffer because of huge debt being incurred by this reckless dunderheads called pf.the issue of appeasement for the sake of kaponyas should come to end.its like a couple getting kaloba and pretending to their children that all is well.pf think of the burden u are inflicting on the future generations.
Are we safe? I don’t think so.
The only way to develop for poor country like ours may be to borrow
If the intention is infrastructure development well and good. This country is so under developed compared to other countries in the region. It’s as if we have had a civil war. Let PF take the bold step and build more clinics, roads, schools for our people.
It’s better to have a government borrowing to develop than a government stealing and not developing. Thank God for Saving the dying villager without health centres from the greedy hand if Bwezani and is sons.
Go PF go…………we behind you………If you steal we’ll chuck you out as well
I feel sorry for you and you should visit chainama hospital to be examined whether you are a human being and living a normal life.
Where is the money saved from subsidies? Why are you not asking your pfoolish leaders that can’t even explain the direction the country is heading? Your govt has simply failed because they have left everything in the hands of an incorrigible, semi-illiterate, arrogant, dictatorial dying He-goat!!!!
If only the nation could be told what this loan is for. Looks like when getting the money, the people of Zambia who will have to return loan are not being informed what the loan is for? The government verhmently denied that it was broke but all signs point to the fact that there is no money, what with all the budget deficit. If only the minister of finance could say no to the unbudgeted projects which are now dragging the nation into humongous debts again.
The biggest world economy US is bankcru
Pt. For three days the American govt has been shutting
down . Think before u vomit your nonsense critising govt for the sake. of it. The all world is in financial problems and zambia is no exception.
Why do u pretend as if under mmd zed was heaven on Earth you hypocrites ?
Kapoma, just because they talk a lot and show off shouldnt make them the best. Look at china and most countries in the east, how are they managing? Fact is, we cant keep borrowing and just play with the money and expect not to be criticized because america is also in sh…..t
America is not broke. The shut down has nothing to do with lack of money. It is as a result of disagreements between the republicans and democrats on the Obama Care law which demands that every American should have a medical insurance. Due to this the budget has not been approved therefore the Government cant spend because it would be illegal. The US economy is still by far the biggest in the World i.e three times that of China and despite the shut down, it will not collapse. By the way this is not the first time it has happened. it has happened 18 times before. Ours is a fragile economy and we should be careful when making comparisons with countries like USA. It is like comparing Mike Tyson to Catherine Phiri. The two are totally different.
It safer to avoid talking about matters you don’t fully comprehend. The shutdown is not about money, but about the failure by congress to pass the budget.
Well said!! At least we can see roads. I am actually saving money I used to spend on regular purchases of vehicle spares. More money in my pockets!
Go Zambia Go, borrow and borrow big, bakesa mukulipila abashikulu besu…..
you are sick, keep the no sense to yo-self, people who think smartly are writing sense to see the way forward of this country and here you are writing no-sense. its a pit that you great grandchildren will live to remember you as Ichipuba.
SHE HE has none
Soon shall be another Greece.
Harness abundant natural resources for income generation than borrowing.
and were the hell is the 750m uerobond? apapene nabapwisha
Absolutely No surprise in there! If all the world’s biggest economies are literally on there knees financial wise! We can do with a ka 250 to boost our economy!
ALL YOU NAYSAYERS OUT THERE, DONT ARGUE WHEN THINGS ARE AS PLAIN AS THE SHAMBLES THE WORLD ECONOMY IS IN AT THIS MINUTE!!
You fool, waste of time to say much to your nonsense.
Where is the Eurobond fund?
Loan to sustain the increased civil servants salaries.
The problem with policticking is that it shuts a certain part of the brain responsible for logic. You cannot run a country like Zambia via bootstrapping nless you ar talking of a kantemba. At the growth rate Zambia is at , we can manage to service the debts. The proble is some of you immigrant bloggers from the dog site already have a predetermined notion of what you want, so it does not matter what the Government does, the only thing you look out for is the negativity. I know a lot of politicians who were looking forwad to the government failing to effect the new wages, the moment the wages were paid they said the governemnt if using money from the Euro bond when before the wages were paid the same pundits could not predict that the government will use the Euro bond. This is Lunacy.
HOW MANY LOANS AR YOU GOIN TO SERVICE AT ONE TIME?MIND YOU ITS NOT ONLY EURO BOND BUT ALSO OTHER DEBTS.
Sata should have just swallowed his fullish pride and asked either Musokotwane to continue as Finance Minister or nominated Magande as MP and appointed him as Finance Minister. Magande and Musokotwane are the best Finance Ministers that have served Zambia since 1991! Kudos to Levy and RB for looking beyond ethnicity and relations for their choice of technocrats!
kwena we have a bunch of dull bloggers…..most of you pride yourselves in living ‘abroad’ where there are state of the art infrastructure, where in hell do you think those respective governments got their monies from?? read about PPP, BOOT/BOT, and other sources of project finance before rapping crap in public especially on a forum like this one which houses the educated & wise ones like me….
You are educated? I never knew. How come you dont debate from the article but from insulting inner feelings? Which school did you go to?
Loans are both good and bad. Good if they can pay for themselves bad if they ae meant for consumption only. Lets hope the PF is not borrowing for consumption and stealing like the MMD did. We wait and see how this money will be put to use.
Peace and Prosperity to Mother Zambia.
What exactly did MMD steal? What has happened to the money that was left in the coffers which was the most we have ever had since independence?
Only an ***** support borrowing why pf cadres that dull you even support stupid things that are going to affect even you and your poor families be objective keep kaponya. Mentality in pf don’t bring it online embarrassing yourself and zambia there’s no good that comes out of borrowing
don’t fcuk with me dik-face…..i can feed your entire clan ******we! do you know how much nkongole US has? where do you expect government to get money for social amenities? ulabwata bwata without facts….emulate ‘Truth hates’, he sounds sensible….do you even know what a ‘syndicate loan’ is???
Some of you bloggers have a higly geared balance sheets.. from bayport loans to kaloba. lets be objective.
Danger! Danger! Danger, on the horizon.
We are heading back to those wasteful Bankrupt U.N.I.P, days.
Problem is this money will not be utilized properly,but corruptly siphoned into Politicians pockets
The current management of Zambia’s resources & finances, is highly suspect.
I ask all the UPND cadres to go back to watch dog, bafi.kala there is nothing you are contributing (commenting) axcept idiocy and stupidity
let the government work and where neccessary let them borrow, for the smooth running of the country. tiyeniko ba styopet!!!
dude, we know there’s only one of you just changing ama shina so, really, impact iya nsele uletukana taile panga nangu fimo waishiba? Try mu chi Nyanja.
@Reactor,
Take it easy and comment decently without resorting to insults and name-calling. Many are concerned about how these huge loans are accounted for. To date we have not been given convincing figures on the distribution of the euro bond billions and that is the problem.
You talk of ‘smooth running of the country’ when many of your PF MP’s abscond from parliament for no apparent reason. Be serious. Your comment on the Zambia Watchdog sounds like you are a regular read of the publication and for your information even Mr Sata reads it.
These PF thugs found $2 000 000 000 at BOZ when they took over from RB! What did they do with all that money? Spend it?
Yes bwana Observer, we spent it to improve the Zambians welfare. where do you think the money we are spending on Link Zambia 8000 road projects is coming from? we have increased workers salaries by 60 to 80%. we are building a University in each province including Mulakupikwa university in Chinsali. funded farmers fertiliser input programme and many more. we need money to make money and feed the the nation.
A syndicated loan is one that is provided by a group of lenders and is structured, arranged, and administered by one or several commercial banks or investment banks known as arrangers.
Disadvantages of syndicated loans?
In: Loans [Edit categories]
Answer:
time consuming,
only for huge borrowings,
long and lengthy process and different credit and financial checks,
Just start taxing the mines and not less than 35% corporation tax. Period! Why what how why are you afraid of introducing taxes on mines? We have them making more profits than they where sold at, $627m. what’s wrong with Zambian leaders? Seriously! Mineral taxing can finance government spending instead of loans. Tax them for polluting the environment and making agriculture impossible and tax them for not paying tax for over 10 years when they’ve returned their investments and are now making profits. Pass that taxation bill on minerals!!!!
@27 Professor – Well said. At least someone’s talking sense for a change.
Same thoughts…You are the only sensible person with the forward thinking minds we need in Zambia. Some people criticize for the sake of it! How is it possible that Mr Sata is 100% wrong and you are 100% right ALL the time?
Anyway having observed the political climate in Zambia this is the reason why there is no proper opposition.
Zambia is been ruled back backward, stiopet hynas, it wll take yrs to recover. Amambala aba needs to be wiped out
Imagine that U.A.E got independence a full 6yrs after zambia but now they are 200x times richer and 200yrs ahead of us.
This Government will SHUTDOWN one day, no prudence, no care and yet we are being committed to these LOANS everyday God help us.
ba chikwanda you are not happy with your work ukulya takupwa just step down on principle please,you very unhappy even when you are signing its like someone pointing a gun at your head i can see you are forced to do what is wrong,eish pf…dont print more money pilizi
Two or three banks teaming up together to raise those funds at commercially arranged rates with counter parties.
Often the quickest and most expense way of raising money in transaction costs and securitization,syndication.
Very expensive if not coming from syndicates/dealers themselves. People in these deals often act as speculators scalping position to benefit from insightful and mispricing of terms by those needing funds short.Often times syndicates or simply dealers are well fashioned and connected with wealth people who hold funds and other assets. The lead time for borrows is normally less than 1 day to 3 months and they repay. Its like going to a caplet of friends quietly and say help.
Too many liabilities leaving less room for reinvestment! HH used to talk about PF poor planning all the time and bloggers would shoot him down all the time. Bloggers took it and still take it personal when the guy (HH) has the best interests of the nation at heart.
Blessed are our zambian children for they shall inherit a mountain of enormous debt.
Yet another manifestation of the similarities between Kaunda and Sata. No clue on economic management but just enslaving the nation with more debts. Any wonder why Chikwanda is the finance minister? He was there in the Kaunda era. so far $1 billion plus, debts, accrued in just two years. Going by this rate, by the time PF leaves power in 2016 ( if Zambians wake up) we will be $4 billion in debt. And then we will feel the wrath of interests and servicing them.
Huh!highly charged wires above but its only a fulish father who hurls insults at his children when when they ask him what he intends to use the latest loan he wants to get.In a thriving ‘though a bit weird’ democracy like ours people seek answers from the government for petitent issues like the above.Snarling and baring fangs at them is’nt the best solution.We just need to live within our means and not get loans to impress.UNIP did the same and thought they were clever until we saw people soliciting for our signatures to petition IMF to cancel the debt.
But where is the money coming from copper mines going? Copper price short to real high levels in the last 2 years and Zambia is meant to be a major world exporter. This is mind boggling!
We only going to be left with trenches, pits and environmental degradation after the so called mining investors have left and wiped out the minerals. “Land is yours money ya kamina”.
Good afternoon
I can fully understand the emotions triggered by such headlines. I get equally flabbersgasted everytime I hear that we are borrowing again because it is a natural fact that loans can be a burden in the long run.
I was hoping to read an explanation from the Minister of Finance. Our country has all the resources needed to be self supportive financially if properly harnessed and managed by the leadership. This is why people voted for change. What is really happening?
You can not expect an explaination from a minister with a brain smaller than a chicken,and not only him.
the much publicized public service workers salary increase has hit hard the council workers who will not get any, parliament office workers are equally yawning argonisingly because there is no increment for them either. on the copperbelt, KCM workers no longer get overtime and are now getting on average K800 take home pay. yaaaba nkani yalula mwe bantu. more money in your pockets, ‘donchi kubeba’
Borrow with responsibility! This loan will be paid by Zambians and not PF, they committing the nation without proper plans, let the explain what the money will be used for or can we assume that its for more by- elections and deputy minister? Get serious bane we only have one Zambia and we can not afford to mess it up with kongole!
That’s why we need a visionary leader with proven track record in business not just pronouncements that lack depth and basis. That’s why in we must change in 2016 Haleisa , Haleisa we need a new crop of leaders !!!!!!!!!!!!!!
Abash old guards!! Shileniko abaiche twachula pafula!!!!
What’s written on the ‘face’ of Zambia is ‘stu.UUPID’! First copper prices reached the highest they had been in 40 years. The joke of a government refused in collect windfall taxes. And now they have the audacity to tell people they are getting a loan?!!! Seriously?!!!
Normally a similary loan of usd 250 equivalently borrowed on a us risk free rate will have a yield of 4 percent to this you add transaction costs and other spreads to compensate for any risk assumed.like the secretary to tt has hinted,its a bringing loan to finance planned projects.Thats fine but other revenue raising activities and methods of funding could have been used to reduce on the excesses.
Syndicates pass on money and costs which they chull without they themselves placing.You are simply paying for there talk which you yourself could do given the credit worthiness of Zambian govn as rated by nationally or is it globally accredited rating agencies. A country to country could have…
Nothing wrong to borrow for development, cheap bloggers keep expressing their ignorance on a clear matter.
you are right, there is nothing wrong to borrow for development. And for this statement to be true, there is need for clear strategy to grow the economy above a certain thresh-hold so that a country can repay the loan with minimal effects on the economy. For your own information Zambia has been this route before, and the end results were bad.
Zambia’s debt will be in the billions of $$$ come 2016. These guys are fattening their pockets for the long haul…they already now tough times are coming. Cry the beloved country…..what surplus? I miss baba RB!
sometimes retracing the budget to earlier years will be a cheap way of financing gov expenditure without stalling the economic gains and development.Fitting and scalling down on the roll out of most important and critical projects in the world of wide opportunities and limited government resources both in Human and Capital.Otherwise progress being made by gov is well seen and intended but panel beating and retracing the budget could be helpul.
Like said above syndicated loan is best suited for corporates and mostly must be well priced and not left to scalpers as it where.They can burn you and leave you with scares and simply create market in the sydicated
Jonathan
This is why I need to leave this country before the effect of these debts start affecting a common man on the street…
WHERE IS THE MONEY SAVED FROM SUBSIDIES IMWE BA KAPONYA?
Ask your parents to sell some chibwantu and visit towns, you will see new roads.
The only sure way a state will fail is debt, debt, debt…. and Zambia is fast taking this route. what a shame, that we still have people who think borrowing on such a large scale is a good thing. In simple terms this govt is borrowing for the next generations to pay. Our children are in trouble.
There goes the value of the Kwacha.
each country has a captive bank apart from its central bank just like the Feds Britons and our Neighbour SA to raise funds on its behave apart from its MOF and central bank later on its treasury.We have a captive bank in Development bank of Zambia.The three institution should be supported to stimulate fiscal and monetary policy at the level of economic development and state. Applying fiscal and monetary policies to fine tune and shape the economy towards the set economic indicators while constantly rechecking and rebalancing policies in surplus and deficit.WHT or transaction taxes on these huge loans on the financing/raising side and spending side can help to recoup some of the costs incurred and use to repay…
sometting raising finances thru captive Banks like the Feds and others have can be much effective and less costly to Gov and saves the face of Gov.The Feds have various Banks to support development,DBSA in south Africa and the likes in England.Then Treasury and Mininstry of finance,the Zra Fiscal arm and the central banks the monetary arm play there respective roles in stimulating the economy in surplus and when in deficit.Look at the segregation of duties in the Ben bernake and Jacob Zuma in Treasury and monetary supervision and lets learn a leaf on there structure and flexing.
Taxes and wht or transactional costs can also be a way of getting back some of the costs on these funds .Usually other native countries…
I edge the government to borrow more for the sake of infrastructure development before i finally kick the bucket. Period.
They are borrowing to enrich themselves. There is corruption in everything government is doing. Suppliers to government and army are not being paid. Debt owed to suppliers compared to december last year has gone up by 69%. RDA is not paying the contractors. They are just getting new vehicles through the contractors and enjoying GRZ (Going round Zambia).
Keep Borrowing series, keep borrowing returns, Return of Keep borrowing, Keep Borrowing again, POP Corns please
We no longer need politically focused presidents like Sata anymore, but those with economic focus like H.H. Pf guys have failed lamentably to manage the Zambian economy.3 years of RB was far much better, honestly speaking.
sometimes comments offered constructively develops the nation and its being.Its good that the “state of union address by our The Four Financial anchors continue ,The Honourable,ZRA and BOZ.Sometimes the thick of things can be crarified and suggestion to alternatives target from critical professional in attendance and online comments.
your know like a worshop or webnar where the treasuries and forcast are highlighted and put and then a policy statements to monetary and fiscal will help greatly to reduce speculative talks and speculation surrounding the Zambian economy as to which way