Acting Minister of Finance Emmanuel Chenda has revealed that the previous government borrowed US$145 Million before the September General Elections in order to finance some road programmes in a hurry.
And Chenda, who is the substantive minister of agriculture and cooperatives says Zambia’ status as middle-income country is doubtful.
Chenda was speaking in parliament Thursday evening when he presented a Policy Statement on Estimates of Expenditure for the Ministry of Finance.
Chenda also said Zambia will raise its planned Eurobond to $700 million from $500 million as it expects high investor appetite for the debt.
‘During the year, Zambia got a B+ Credit Rating, as well. This has improved investor sentiments about the economy and created conditions in which increased borrowing from the international community to finance our infrastructure needs is affable.
‘The country’s target was to issue a Bond of US$500 Million, however, the previous Government borrowed US$145 Million before the September General Elections in order to finance some road programmes in a hurry. This means that the planned amount for the bond reduced’, he said.
Chenda told parliament that the change in Government, the commitment to the fight against corruption, strengthening of public service and corporate governance, and the realignment of significant resources from running Government to social sectors and infrastructure have also improved confidence in the Government among Zambians and the rest of the international community.
He further said that ‘one indication is in the numerous enquiries, which we have received from both local and international prospectors on our intended issuance of a sovereign bond.
‘Indications are that the bond might be over-subscribed thereby giving us leeway to raise it to around US$700 Million.’
On Zambia being a middle-income, Chenda said ‘early in the year, the World Bank bestowed Zambia with the status of being a lower middle-income country, despite entrenched poverty in rural areas. This was largely due to the high copper prices and without much regard to population dynamics and other income factors like equality. The recent turbulent trend of copper prices renders this status questionable.’