Minister of Finance, Margaret Mwanakatwe says no unilateral action will be taken by government if the offer from a Turkish company to refinance the 2022 Eurobond crystallizes.
In statement obtained by Q-news on the rating action from Moody’s and Fitch rating agencies, and on refinancing the 2022 Eurobond, Mrs Mwanakatwe says while government is open to discussing financing of the Eurobonds to achieve lower costs and longer maturities with potential investors, this exercise will be done in full consultation with the bond holders and in accordance with international market standards.
She says government standards by the commitments made to bond purchasers at the time of issuance of the Eurobonds not take any action without consulting holders of Zambia’s bonds.
Mrs Mwanakatwe further states that such an operation is not in any way a signal of failure to repay the Eurobonds.
She states that the government remains fully committed to meeting all its liabilities on time and in full.
The Finance Minister has disclosed that a redemption strategy has since been developed for the three Eurobonds.
She says the strategy is currently undergoing integrity reviews prior to seeking cabinet approval.
And Mrs Mwanakatwe says Zamia’s debt accumulation will slowdown in the next 2 to 3 years.
She says it projected that the country will attain a reduction in debt ratios after 2022.
She states that given this scenario, fiscal slippages will recede and that government does not see protracted debt as it will stand firm on its fiscal sustainability measures.
Mrs Mwanakatwe says the government has noted Zambia’s ratings of B/Negative outlook and Caa1/Stable outlook assigned by Fitch Rating Agency and Moody’s Ratings respectively and has discussed the issues raised by the Agencies’ analysts.
She says the government is swiftly implementing the measures announced on 14th July, 2018 as part of broader policy reform to tackle the challenges that relate to debt, liquidity, and the fiscal deficit.
The Minister further states that these measures will lead to slowing down the rate of debt accumulation in 2018 and over the medium term and tackling the fiscal deficit which is forecast to be below the 2017 announced deficit of 7.8% of GDP.