Zambia to start refinancing Eurobonds in 2019
Finance Permanent Secretary Mukuli Chikuba has revealed that Zambia will begin refinancing Eurobonds worth $2.8 billion in 2019.
Mr. Chikuba said the financing of the Eurobonds was expected reduce the cost of debt servicing for the country.
Debt refinancing involves a process where a country or an organisation reorganizes its debt by replacing or restricting its existing debts using funds raised by issuing fresh debts.
He said Zambia’s debt rose from 35 percent of GDP to 60 percent between 2015 and 2016 partly due to the Eurobonds, which were issued from 2012 to 2015.
“We are remaining with just a few more years before the first Eurobond is due. By 2019 or so we will start the refinancing,” Mr. Chikuba said.
He said Zambia would either buy back the debt in Zambia’s name or find other investors to do so over a longer period.
Mr. Chikuba who was speaking during the IMF Sub-Saharan Economic Outlook-Fall 2017 presentation the Zambian said government has embarked on a robust economic reforms to transform the country.
And International Monetary Fund has advised the Zambia government send a revised programme for the 1.3 million package bailout.
IMF Resident Representative Dr Alfredo Baldini said the Fund is still concerned that government has not tackled most of the major issues such the increased domestic and external borrowing.
He said the negotiations between the IMF Board and the Zambian government will continue until the government meets the set out goals by the Fund.
Dr Baldini said the Zambian government should hasten the pace at which it is making economic reforms.
Zambia and the IMF agreed in October to chart a new path towards debt sustainability after the IMF delayed the conclusion of talks with Zambia saying it was at high risk of debt distress.
Last Thursday, IMF Director of Communications Gerry Rice told a media briefing in Washington D.C that the Fund put the negotiations for a Zambia bailout package have been put on hold due to Zambia’s high borrowing plans.