State launches new strategy to tackle debt crisis

Fri, 23 Feb 2018 08:56:03 +0000

By BUUMBA CHIMBULU

GOVERNMENT is developing a new strategy to ensure the country’s debt distress is moderate over the medium term to help re-engage IMF, Minister of Finance, Margaret Mwanakatwe, has said.

Ms. Mwanakatwe explained that the new strategy was also aimed at addressing the economic development aspirations without compromising debt sustainability.

She explained that the mechanism was aimed at bringing debt levels to moderate risk over the medium term from high risk of debt distress.

In a statement to the Daily Nation, Ms. Mwanakatwe emphasised that once the new strategy had been completed, Government would be engaging the International Monetary Fund to obtain their agreement.

“I will now clarify the position of Cabinet and the ministry on the restructuring of debt. This issue is unfortunately being misinterpreted that Government is anticipating challenges in servicing its debt,” she said.

The minister said part of the new process involved addressing liquidity risks at the time of paying/refinancing of the three Eurobonds,

She said as part of prudent risk management, Government decided to reposition some flows falling due during the period of the three Eurobonds, by engaging some creditors that may be open to participate during the period forward.

Ms. Mwanakatwe said a team of officers from her ministry, the Bank of Zambia and Ministry of Justice had been put in place to undertake work that would determine exactly what form of strategy would be adopted for the repayment/redemption of Eurobonds.

She explained that the work would be completed by the end of the 1st quarter 2018.

“We are not contemplating any stock re-profiling but just the flows that fall due in the period of the repayments. China being a natural first creditor and accounting for 28 percent of our debt was a natural creditor to have a discussion with,” Ms. Mwanakatwe has said.