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We’re committed to debt repayment – Chikwanda

CHIKWANDA

By NKOLE  MULAMBIA
GOVERNMENT says it will focus on growing the national economy to enable the country pay back the US$750 million and US$1 billion sovereign bonds issued in 2012 and 2014, Finance Minister Alexander Chikwanda has said.
Meanwhile, Government says it may consider issuing the US$1 billion agricultural bond, if concerned parties submit bankable documents to Government for approval.
Mr Chikwanda said Government’s premium was on growing the economy to enhance capacity of paying external and internal loans.
Zambia borrowed US$750 million in 2012 and US$1 billion this year.
“We need to get our acts together and move away from division and concentrate on getting our economy going forward…
“If the economy is not growing we will not be able to service these external borrowings,” Mr Chikwanda told a media briefing in Lusaka on Tuesday.
He said bond proceeds were only used in growth promoting projects such as infrastructural projects to enable the economy unfold to higher levels and not on recurring expenditure.
“This is why the bulk of 2012 bond went to financing projects in the power sector….We must be mindful as a country that if we don’t grow the economy, we won’t be able to service these loans. That is why, as part of the strategy, we want to limit borrowing both externally and internally,” he said.
Mr Chikwanda said servicing of the loans that Government has incurred can be a huge problem on the national economy and the country may not have the capacity repay the loans.
He also said the ministry will be cautious on borrowing to ensure loans are obtained with the country’s repayment capabilities in mind.
Mr Chikwanda said the money borrowed through treasury bills and Government bonds caused interest rates to go up.
There have been concerns from various stakeholders on whether Government had put in place measures to pay back the loans and whether it had the capacity of resettling the dues without affecting the economy.
Commenting on the agricultural bond, Mr Chikwanda said Government will always consider giving money to farming projects that had bankable schemes.

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