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Former Finance Minister Katele Kalumba has described government’s issuance of the US $1 billion sovereign bond as a risky but bold move.
Dr. Kalumba has observed that much it is a sign of confidence in the Zambian economy that the sovereign bond is said to have been oversubscribed, it is important that government through the Ministry of Finance and the Bank of Zambia ensure that the bond is not hijacked by whom he has termed as peddlers of the vulture fund.
Dr. Kalumba, who was Cabinet Minister under the Movement for Multiparty Democracy (MMD) regime says government has to ensure that whatever bonds that it puts on the market must be redeemable in accordance to the rules of international financial Market.
The Former Finance Minister has proposed that the Zambia government can take stock of what happened in Asia where there was a collapse of the financial system because of same vulture funds where private companies bought public loans such bonds and wanted to redeem them on higher rates.
He says this is the part where the country ought to very careful to ensure that investments arising for the issued the US $1 billion sovereign bond are managed properly in order that such investments is able to yield outputs that will allow the country to redeem the bond.
Dr. Kalumba says this means that the country needs to invest intelligently in areas of the real economy that can catalyze productivity that will enable the country to earn foreign exchange.
He has further suggested that at this end President Michael Sata should call for a technical roundtable meeting which should be attended by officials from the Ministry of Finance, Bank of Zambia and other stakeholders from the financial sector and informal sector.
He has told Qfm news in an interview that it is this technical roundtable meeting that should discuss which sector of the real economy are not doing well so that such gaps are closed and that investments is made in areas where there will be multiplier effect in order for the country to produce enough to export to redeem back the bond.
