Gov’t will not default on Eurobonds-Mwanakatwe

Mon, 26 Feb 2018 10:17:12 +0000

By MUKOSELA KASALWE

GOVERNMENT is putting in place proactive measures to repay the three Eurobonds when they mature to avoid defaulting, says Finance Minister Margaret Mwanakatwe.

Ms Mwanakatwe said the first Eurobond issued in 2012 worth $750 million was channelled to infrastructure development such as roads, the health and energy sectors aimed to improve the livelihood of citizens.

She said the second Eurobond was worth $1 billion while the third one $1.25 billion which were targeted at accelerating Zambia’s economic growth and that the bonds have been prudently utilised.

The minister said this in Parliament, in response to a question by UPND Kabompo Member of Parliament Ambrose Lufuma who wanted to find out how the Eurobonds have been utilised.

Ms Mwanakatwe told the House that the first Eurobond attracted $40 million interest per year while the second $85 million per year and the third $112 million per year respectively.

“Government does not intend to default on the Eurobonds repayments on the first, second and third Eurobonds due for 2022, 2024 and 2025 to 2027.

“In order to deal with the refinancing risk government is putting in place robust mechanisms such as redeeming the Eurobonds,” she said.

She said other sectors that benefited included the education, energy and water sanitation sectors among others.

Ms Mwanakatwe, who is Lusaka Central MP said part of the second and third Eurobonds were channelled to agriculture which gobbled $2.6 billion and general budget support as well as the recapitalisation of TAZARA.