Zambian Government Debt stands at $9.7 billion

Filed under: Breaking News,Business |

half mast flagDocuments from the Ministry of Finance shows that Zambia’s total public debt is $9.75 billion dollars. This debt is made up to $6.05 billion external debt and $3.7 billion domestic debt. The total public debt has increased from $3.5 billion in 2011 to about $9.75 billion today, an increase of 176 percent. The debt has risen by 176 percent since 2011, and analysts say that the state does not have the means to repay it.

Zambia has three outstanding Eurobonds, the first for $750 million issued in April of 2012, the second for $1 billion issued in June 2014, and the third issued in July 2015 for $1.25 billion.
But the country will struggle to pay the interest on these bonds, according to the Zambia Institute for Policy Analysis and Research (ZIPAR), which estimates annual interest on the bonds at $240 million. The amount required to service interest and repay the principal is about $440 million annually, according to the institute.
Because the Eurobond debt is in dollars, the government will have to pay considerably more in the weak kwacha which it earns – the Zambian currency has lost about 30 percent against the dollar in 2015.

But this is not the only portion of the debt that poses challenges for repayment, according to Economic Association of Zambia (EAZ) President Chrispin Mphuka. “It is most likely, the Zambian government in its current form will not be able to raise the outstanding debt contracted to our Chinese lenders. The government will have to contract more debts to settle these loans,”

According to Mphuka, there is a shortfall of $642 million in the funds provisioned to completely settle the over $3 billion debt the Zambian government owes to China.

“The economic slowdown resulting from depressed commodity prices and low productivity has put the Zambian government under serious financial stress, and revenue collection has not only been compromised, but significantly reduced,”

A study carried out by the Jesuit Center for Theological Reflection (JCTR) in 2014 revealed that government debt contracted between 2012 and 2013 was spent servicing loans made between 2003 and 2005.

By Dr Cholwe Beyani


10 Responses to Zambian Government Debt stands at $9.7 billion

  1. Uko wapya munzi.

    Bane your waists will be cut as a result of tightening the belts.

    Xiping of china has also tightened the lending policy. Even Mugabe Lungu ‘s mentor has been refused a Chinese loan.

    This is proper dununa reverse at its initial stage. PF has adequately prepared for riots by buying gumba gumbas once used is South Africa during apatheid regime.

    The worst is yet to come bane.

    October 5, 2016 at 4:47 pm

  2. Uko wapya munzi.

    From a reserve of $2billion when PF took over to debt of over $9.2billion in just five years!

    How did we get here bane? Who is responsible ? PF is the culprit here.

    The real debt figure is around $20billion. PF are liars and they are conservative with the truth.

    Lungu has now bought more arms to kill innocent citizens.

    October 5, 2016 at 4:56 pm

    • Its funny how it all adds up. I mean we had about 2 bil in reserve and then just after the 5 years that PF has been in power, we accumulate a debt 4 times what we had… Poor us, but who’s to blame?

      Xavier Genius
      October 5, 2016 at 11:33 pm

  3. my fellow Zambians, would you ask who to blame when in an actual sense you know, we’re yet to see the waste, this is the dununa and not one of dancing.Goodmorning fellow countr men and women?.

    October 6, 2016 at 3:16 am

  4. No capacity to repay – coz wen required at important meetings to discuss how to repay my tribe man ? starts dancing – lungu is de president —

    Robert Sulamoyo jr
    October 6, 2016 at 4:38 am

  5. What does Dr. Mphuka mean when he says “The Zambian Govt in its current form….”? Such careless and polarized statements are not helpful but just go to show that even the people who are supposed to add value to the discussion of the economic development of our country either know nothing or are bitter characters who have been pushing a failed agenda. The country is able to see some of the pedestals arising from this debt – let’s not pretend not to see what is on the ground. Of course we can manage contracted loans much more prudently, but $10 billion should not be scary for an economy like ours.

    October 6, 2016 at 5:04 am

  6. How can really justify this leap in such a short space of time?

    October 6, 2016 at 7:10 am

  7. How can you really justify this leap in such a short space of time?

    October 6, 2016 at 7:11 am

  8. The problem with Zambia is that such information has got no bearing whatsoever on how majority of Zambians vote. It’s quite sad that ignorance, tribalism and illiteracy can never allow our voters to objectively pick leaders based on cold facts like those published in the article.

    Our economic situation is tricky and one wonders what it will take to get out of it. A party comes into power for 5 years and nearly collapses our economy and so many people are still singing praise songs for that party. That kind of situation is just shocking really.

    Advanced 1
    October 6, 2016 at 7:57 am

  9. amen Zambia God help us for we don’t know which one is right. let u be the judge or will continue pointing fingers at each other

    no body knows
    October 7, 2016 at 8:26 am

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