Bruce Mwale

Zambia issued its third euro-bond on 30 th July, 2015. The bond issue amounted to US $1.25 billion at a coupon rate of 8.97 percent. The final order book reached US $2.5 billion from more than 175 investors from the United States, United Kingdom, mainland Europe and other global markets. The advance interest payment (or discount) on the bond amounted to US $34.3 million. In terms of geographic distribution the USA took the highest share at 48%, UK took 42%, rest of Europe 9%, and other regions accounted for 1%. By investor type, fund managers took 84%, insurance & pension funds 4%, Banks/private banks 3% and hedge funds 9%. The repayment of the USD1.25 billion euro-bond will be made in three equal installments of US $416.7 million in July 2025, July 2026 and July 2027. The choice of amortizing the bond in three equal installments is to reduce the gravity on the Government in amortizing the US $750 million, US $1billion and the US $1.25 billion, bonds. Desp...

Zambia‘s economy is one going through what I would call a turbulent moment. It is a country with a lot of natural resources, but things don’t just seem to go right somewhere. To start with, within three years, the Zambian kwacha has depreciated by about 54%, from $4.86 to the current $7.46 a dollar. Government has labored to explain that the depreciation is largely on account of the persistent weak copper prices and the global strengthening of the US dollar. Zambia’s extremal debt currently stands at about US$4.8 billion representing about 18.5 percent of GDP while the domestic debt is K20.5 billion (approximately US$3.7 billion) representing about 14.2 percent of GDP. Total public debt is therefore around 32.7 percent of GDP. In 2011 when the new government was taking over the reins of power, foreign debt was at $1.2 billion. At the presentation of the 2015 national budget, government had projected a budget deficit of about K8.5 billion but currently that amount has been r...