We will not default on Eurobond – Mwanakatwe

We will not default on Eurobond – Mwanakatwe

 

Finance Minister Margaret Mwanakatwe says she is not worried about the prospect of Zambia defaulting on the imminent single-bullet repayment of the US $750 million Eurobond, which matures in 2022.

And Mwanakatwe has directed Ministry officials to release all essential information relating to Zambia’s economy in a timely manner to avoid an unnecessary vacuum that creates uncertainty.

Addressing questions during an update on economic developments in Lusaka, Friday, Mwanakatwe said she maintained confidence in government’s ability to afford to repay the entire US $750 million Eurobond as a single bullet payment when it eventually reaches maturity less than one year after the August, 2021, general election owing to the Sinking Fund, among other measures.

“We have set-up a Sinking Fund; we are building in the medium-term, funds to be able to cater for some of that. But what we are doing is an Asset and Liability Management Programme in-house. We’ve done a strategy for Eurobond redemption, which I am yet to share with Cabinet, so we are not worried about defaulting on the Eurobond when it falls due in 2022,” Mwanakatwe explained.

On a question relating to non-performing parastatals, Mwanakatwe allayed any suggestions that dividends paid to government were dwindling.

“Parastals not performing? A few years ago, we had one company declaring a dividend, now we have eight! Next (this) week, I am expecting a dividend from TAZAMA, and it has improved from last year. We want to see more of that,” she added.

And Mwanakatwe directed Ministry officials to release all essential information relating to Zambia’s economy in a timely manner to avoid an unnecessary vacuum, which created uncertainty.

This was in response to questions and heightened concerns from the media about the lack of transparency in releasing timely, economic-related data to the public.

“Information flow? I take that as a real concern, judging from Taonga (Mitimingi) and Prudence (Mushota) that we need to give you information when you ask for it. So, (Chileshe) Kandeta, when you are called to give information, please give it them! We don’t want to create a vacuum where there is no information, want to give that information,” ordered Mwanakatwe.

“But what we’ve done today (Friday) by opening up to more people on a quarterly basis, that in itself is information flow. What we do, monthly, is give out a statement on budget performance, that is a critical document as well.”

Earlier, when prompted on what government should do to counter to negative sentiments on the economy allegedly being perpetuated by media institutions, such as Bloomberg, among other outlets, Mwanakatwe forced Bloomberg journalist Taonga Mitimingi to the front of the podium to address that question.

“Negative sentiment? Especially, Bloomberg – Taonga, where are you? Can you come and answer that one; what are you going to do? Come, Taonga! Mr Bloomberg is here, let him answer that one,” she demanded, amidst laughter from the bemused audience.

But Mitimingi calmly defended the network and explained that negative sentiment on the local economy usually thrives when government did not honour its obligation in releasing timely and accurate information to stakeholders through the news media.

“Well, speaking as Bloomberg correspondent for Zambia, I would safely say that, in our reporting, we strive to be as factual as possible. I think sentiment goes beyond what we report; it stems from, to a larger extent, on what’s going on the ground, it’s not something that we come up with. Sometimes, these are things people pick up that what is being said locally, as much as we may take it for granted, it has an impact and bearing on what investors out see and project about the country,” he explained.

He challenged Mwanakatwe to be timely in releasing much-needed information on economic developments.

“Therefore, I’d like to take this opportunity, Honourable Minister, to put you on the spot that, much as we have these interactions, we would like to see a situation where going forward, in a nutshell, we must strive for factuality. And even as government, when we do call upon you for any information, I hope that you will be readily available to present this information to us as the media. In some cases, there is a perception that government would want to hold back on certain information. If there is no information out there, it creates a vacuum, and when that happens, speculation thrives,” said Mitimingi.

He hoped to see more transparency from government going forward.

“Going forward, I hope that we’d see more transparency and openness. Criticise us when you should, we welcome criticism. However, we do take note of the fact that, we owe it our audiences, readers and subscribers on the terminal to be able to provide them with factual, accurate information on what’s going on with Zambian economy,” said Mitimingi, drawing rapturous applause from the audience, as Mwanakatwe concurred and thanked him for his impromptu contribution.

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