EXTERNAL DEBT PAYMENTS ON COURSE – YAMBA
Mon, 25 Sep 2017 14:34:02 +0000
By Buumba Chimbulu
GOVERNMENT has announced that its external debt service payments in the first half of 2017 amounted to US$275.59 million, an indication that it is servicing its Eurobonds, among other arrears.
Secretary to the Treasury, Fredson Yamba, said Government’s external debt stock as at end of June 2017 increased to US$7, 477.53 million from US$6, 946.71 and 946.71 million at end December 2016, an increase of 7.6 percent.
Mr. Yamba explained that the largest increase of 15.7 percent was for export and suppliers credit, which was contracted mainly for infrastructure projects, including roads.
“Under the multilateral debt category, the largest increase was concessional borrowing from the World Bank. The stock of commercial borrowing also increased by 5.8 percent and was earmarked to finance the budget while bilateral debt largely remained flat,” Mr. Yamba said.
He, however, said Government had so far spent US$275.59 million on the external debt in the first quarter of 2017.
Mr. Yamba said in the 2017 Mid-Year Economic Review that principle payments were US$58.58 million, while US$217.07 million was paid as interest.
He explained that the larger component of interest payments was on Eurobonds which amounted to US$118.72 million.
On loans contracted, Mr. Yamba said Government during the period under review contracted five loans amounting to US$296,044,345.90 million to support the development of key sectors outlined in the Seventh National Development Plan (7NDP) such as mining and quarrying, agriculture, forestry and fishing.
Mr. Yamba said other areas were transport, storage and communications among others.
“During the period under review, stock of domestic debt excluding arrears, increased by 27.4 percent to K42.0 billion from K32.9 billion at end of December, 2016.
This was mainly because of increased demand for Government securities due to easing liquidity conditions, which resulted in higher participation by both local institutional and liquidity conditions,” Mr. Yamba said.
He also said the average subscription rate in the period under review for Treasury bills and Government bonds was 91.9 percent and 123.8 percent, respectively.