On behalf of Zambia, the PF government will today issue (borrow) a 10-year Eurobond of as much as $2 billion on to fund a widening budget deficit.
The additional $2 billion debt will push Zambia’s external debt to $6.8 billion from the current $4.8 billion. This means that Zambia’s external debt will surpass the debt acquired by the UNIP and MMMD of Fredrick Chiluba. When Levy Mwanawasa took over as president, Zambia’s external debt was US$6.2 billion. This is the debt which donors and International lenders forgave Zambia after Zambians sacrificed under Mwanawasa through the Highly Indebted Poor Countries Initiative (HIPC).
That sacrifice has just been rendered useless. It was in vain. We have a bigger debt than what we had that time.
“This debt is too gigantic to repay and we are spending all the money we are earning to pay these debts … there is very little remaining to invest in useful sectors of education and health,” Mwanawasa told CNN before the debt was written off.
But the PF does not care.
“We expect the Eurobond to be issued today. It will be between $1.5 billion and $2 billion and the maturing date is 10 years,” Amos Chanda, a spokesman for President Edgar Lungu, told Reuters.
Zambia’s budget deficit is expected to swell to 20 billion kwacha ($2.64 billion) by the end of 2015 from an initial forecast of 8.5 billion kwacha.
Zambia has not paid back the debut $750 million bond it got in 2012 and the $1 billion bond it borrowed in 2014.
Zambia’s external debt currently stands at $4.8 billion, about 18.5 percent of gross domestic product. Its domestic debt burden is $3.7 billion, about 14.2 percent of GDP, finance minister Alexander Chikwanda said in June.