The US$1.25bn Eurobond in Zambia-Yamba

THE recently acquired US$1.25 billion Eurobond by Government is now at the Ministry of Finance, says Secretary to the Treasury Fredson Yamba.
Mr Yamba said in an interview yesterday that the ministry would soon call a media briefing to explain to the nation on the key areas the bond would invested in.
“If you want to know about the Eurobond, I can tell you that the money is now at the Ministry of Finance, we shall call for a press briefing soon to give you more details,” he said. And Mr Yamba refuted allegations from some sectors of the community that Government was taking Zambia into a debt trap. He explained that Zambia could only be in a debt trap if the Gross Domestic Product (GDP) was equal to the external debt. “This is something that people should understand because you only get into debt trap when your debt is equal to your GDP and we are way off that mark,
He said there was no way the country would be in a debt trap when in the past it managed to survive when the debt was US$7billion and equal to the GDP.
Mr Yamba further explained that Zambia had the capacity to buy part of its debts when it refinanced the first two bonds because of its fast growing economy.
“What you should bear in mind is that the economy is growing and when the economy is growing, you have more resources and then you need to push the resources into any revenue activity, “As a country, you can start buying back part of your debt as you go forward. It is a long-term way of dealing with the debt, so there is the issue of refinancing and sinking fund,” he said. Mr Yamba said that Government was still considering either refinancing or sinking fund the two Eurobonds in order to reduce the pressure on the fiscals.

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