Finance Minister, Margaret Mwanakatwe, has downplayed suggestions made by financial commentators regarding the of US$ 750 Eurobond due in 2022.
Last week President Edgar Lungu, said when he hosted Turkish President Recep Tayyip Erdogan at State House that a Turkish Company is being courted on refinancing the 2022 Eurobond.
Mwanakatwe said that whilst the country was open to discussing financing of the Eurobonds to achieve lower costs and longer maturities with potential investors, the exercise would be done in full consultation with the bond holders and in accordance with international market standards.
“If the offer from Turkey crystallises, no unilateral action will be taken by the government. We stand by the commitments made to bond purchasers’ at the time of issuance of the Eurobonds not to take any action without consulting holders of Zambia’s bonds,” she said in statement.
Further, Mwanakatwe emphasized that such an operation was not a sign of failure to repay the Eurobond.
“We remain fully committed to meeting all our liabilities on time and in full. In line with the foregoing, we have developed a redemption strategy for the three eurobonds,” she said.
The Finance Minister said that the strategy is currently undergoing integrity reviews prior to seeking full cabinet approval.
“Further, the Government is in the process of engaging financial advisors on implementation of the strategy. In so doing however, we are duty bound to interrogate any other asset/liability proposals that may come from other private and bilateral partners, with the proviso that it should be cheaper and procedural in terms of international capital markets operations” said Mwanakatwe.
Center for Trade Policy and Development executive director Isaac Mwaipop says the move by government to seek help in refinancing the US$750 million Eurobond scheduled to mature in 2022 may translate into increased costs due to the suspended international monetary fund (IMF) bailout package.
Mwaipopo is urging government to concentrate on realizing fiscal consolidation and the operationalization of a sinking fund.
He has since urged the government to pursue the debt agenda with great caution and avoid projecting desperation if it is to find sustainable solutions that will help the country navigate through this growing debt crisis without further indebting the country.
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