Former Finance minister Ngandu Magande says he is worried Zambia is heading back in the external debt trap.
Magande, who as Finance minister saw Zambia’s more than USD 7 billion external debt written off questions Zambia’s recent borrowing of USD 750 million through a Euro bond.
Following Zambia’s borrowing of the USD 750 million from private lenders on the international market, Zambia’s external debt swelled to USD 2 billion and 250 million.
Ministry of Finance Acting Director for Investments and Debt Management Fortune Kamusaki confirmed that the USD 750 million bond forms part of the already existing USD 1.5 billion external debt.
Dr. Kamusaki explained that the external debt is mainly made up of concessional and non-concessional loans.
But Magande is wondering why Zambia is now borrowing money on the market (private lenders) as opposed to getting concessional loans from Western governments.
From 2001, late president Levy Mwanawasa and his finance Minister Ngandu Magandu laboured successfully to remove Zambia’s $7 billion external debt which was accrued mostly in the first ten years of the MMD.
Mwanawasa and his team managed to have Zambia’s debt written off completely.
With these new terminologies of Eurobonds, Zambia is headed into another debt trap which coming government will have to pay back.