ZAMBIA should never find itself in a position of debt accumulation, Minister of Finance and National planning Situmbeko Musokotwane has assured.
Dr Musokotwane in presenting a ministerial statement in Parliament on debt restructuring agreement with bilateral creditors said the country will be paying it’s official creditors about USD$750 million only over the next 10 years.
He said this is compared to about USD$6.3 billion that was supposed to be re-paid in the same period, under the previous contractual arrangements.
Dr Musokotwane outlined that considering the time value of money as described in the International Monetary Fund’s (IMF’s) Debt Sustainability Framework, the agreement delivers close to 40 percent reduction of the country’s debt burden.
He explained it is as a result of the postponement of repayments and a reduction in interest rates.
“The agreement with the official creditors has several benefits for the country and beyond in various ways.The agreement will generate US $5.8 billion in debt service savings which will unlock resources to be l utilized for our developmental programmes. In the absence of debt restructuring, Zambia would have to pay $6.3 billion in debt servicing official creditors in the next 10 years. However ,with the restructuring, the amount will reduce to $750 million only and will unlock extra funds from cooperating partners,” he said.
Dr Musokotwane also outlined that this year 2023, for example, arising from the agreement reached, both the IMF and the World bank will disburse funding to Zambia of USD$188.8 million and USD$75 million respectively.
He also stated that whereas it’s true that debt servicing will resume in three years, the effect of the restructuring means that the annual cost for debt servicing will be very low.
Dr Musokotwane further said the agreement provides a pathway to restoring debt sustainability in the medium term, thereby leading to an improved macroeconomic environment.
“It will promote renewed interest for Zambia as a country dedicated to economic transformation, making it easier to attract more investment and it paves the way for debt restructuring to be undertaken in a number of African countries facing, or close to facing debt distress,” he said.
Dr Musokotwane however said government still has some work to do with the official bilateral creditors even after this general agreement, made under the auspices of the G20 General frame work for debt treatment.
He said Zambia will negotiate and sign a Memorandum of Understanding (MoU) with its Official Creditors.
He said the MOU will outline in detail the terms of the agreement debt treatment, which will then be implemented through bilateral agreements with each member of the Official Creditor Committee.
“Members of the House are aware though, that as a country, we also have commercial debt that is owed to private creditors for a total amount of $6.8 billion as of end-2022, with notably the Euro bond Holders which are due US $3.5 billion ($3bn in face value and $500m in outstanding arrears as of end-2022),” he said.
Dr Musokotwane noted that as a responsible Government, they are keen on ensuring that the country should never find itself in a position of unsustainable debt accumulation.
“Step by step and methodically, this government is bringing back things in place. We promised to bring down inflation. Done. We promised to stabilize the change rate. Done. We promised to restore order and peace in markets. Done. We promised to provide for teachers and health workers. Done. We promised to reconstruct the country, more especially the country side which was left behind. This is being done through CDF. And, of course, we promised to restructure the debt. Now Done,” he stated.
He further urged Zambians to support the decision by government, adding that they are in good hands under the government of President Hichilema.
(Mwebantu, Wednesday, 28th June, 2023)
ERB lowers fuel prices amid Kwacha appreciation
THE Energy Regulation Board (ERB) has announced a downward adjustment in the prices of petrol, diesel, and jet A-I, bringing relief to consumers.
Effective midnight, petrol will be priced at K31.12 per litre, diesel at K28.78 per litre, and jet A-I at K28.23 per litre.
However, the price of kerosene will remain unchanged at K20.44 per litre.
The reduction in the prices have been attributed to the appreciation of the Kwacha which outweighed the increase in international oil prices therefore warranting a reduction in the domestic wholesale and pump prices of petroleum products.
ERB Board chairperson Reynolds Bowa said the price of kerosene has been maintained, adding that the decision on kerosene pricing will be reviewed consistent with the national supply and demand situation.
In a statement, Mr Bowa said over the review period, the Kwacha significantly appreciated against the United States Dollar.
“On average the exchange rate appreciated 14.4 percent. The appreciation was mainly attributed to interest rate hike by the Bank of Zambia (BoZ) and the directive that commercial banks hold back more funds in reserve. Furthermore, BoZ made available additional United States Dollars to the market,” he said.
Mr Bowa said the prices will come into effect at midnight and shall remain in effect until revised by the ERB.
He however said during the month of February the prices of oil on the international market increased.
Mr Bowa said the increase was mainly attributed to supply disruptions arising from geopolitical tensions in the Middle East which led to tightened supply of the commodity.
Meanwhile, the ERB in line with the Energy Policy has developed a bio-fuels pricing framework that will be used on blended fuel.
Mr Bowa said the growth of the biofuel industry will foster security of supply of petroleum products.
“Currently, a pilot phase for bio-ethanol trading has commenced and ERB will give periodic updates on how this programme is unfolding.” he said.
(Mwebantu, Thursday, 29th February, 2024)
ACC nab senior accountant, businessman
A LUSAKA based senior accountant has been arrested by the Anti-Corruption Commission (ACC) alongside a business man for possession of property suspected to be proceeds of crime.
Kasemuka Chiteta, a senior accountant stationed at police headquarters has since been charged with one count of possession of property suspected of being proceeds of crime.
ACC head of corporate communications Timothy Moono said in a statement that Kasemuka Chiteta on dates unknown but between 7th April, 2023 and 12th February 2024 in Lusaka District, concealed possession of a motor vehicle namely Toyota Landcruiser BAD4360 registered under the ownership of Chimuka Chibawe a Lusaka based businessman.
“In a similar development, the ACC has arrested and charged a Lusaka based businessman, Chimuka Chibawe of plot No. 136 C Kalomo road Chilenje” Mr Moono said.
He said Mr Chibawe has been charged with one count of Possession of Property Suspected of Being Proceeds of Crime contrary to Section 71 (1) of the Forfeiture of Proceeds of Crime Act No. 19 of 2010.
“Details of the offence are that, Chimuka Chibawe on dates unknown but between 7th April, 2023 and 12thFebruary 2024 in Lusaka, concealed possession of a motor vehicle namely Toyota Landcruiser BAD4360 registered under his names when the beneficial owner is Mr. Kasemuka Chiteta a Senior Accountant at Police Service Headquarters,” he said.
The pair has since been released on bond pending court appearance.
(Mwebantu, Thursday, 29th February, 2024)
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