GENERAL NEWS

Zambia records $3.5 bn in foreign reserves

14/06/2014

THE Ministry of Finance says Zambia’s foreign reserves now stand at about US$3.5 billion from $2.7 billion which is around three to eight months of import cover.
Ministry of Finance public relations officer Chileshe Kandeta said the goal was to go to four months import cover in medium term.
He said the external debt currently stood at approximately $4.2 billion including the euro bond.
He said the ratio of debt to Gross Domestic Product (GDP) was about 17.8 per cent of GDP, which was way below the internationally agreed sustainability level of 40 per cent but Government was mindful of the need not to fall back into a debt trap and would therefore be careful with any future borrowing to ensure sustainability and investment of any borrowing in high return growth areas.
In terms of interest payment, Zambia was paying US$42 million annually on the first $750 million Bond and $82 million per annum on the new $1 billion Bond.
“The bonds will be repaid back as a bullet repayment in 2022 and 2024 for the $750 million and $1 billion and respectively. In terms of preparing for repayment, the Government is in the process of establishing a sinking fund for the Bonds,” Mr Kandeta said.
He said the copper price was slowly improving, and currently it was just below US $7,000/ tonne and appeared to be adjusting back to end-December 2013 levels of around US 7,300/tonne.
He said copper earnings in the first quarter of 2014 were $1,907 million while in the fourth quarter, they were US $1,794.3 million and in the first quarter of 2013 they were US $1,772.8 million.
In terms of projections, Non Traditional Exports had been rising by over 20 per cent per annum and Government expected that growth to continue.
The ministry was presently consulting with the Bank of Zambia, ZRA and other stakeholders on the issue of raising funds following the withdrawal of some statutory instruments.
Mr Kandeta said that over the first quarter of this year, Zambia registered a trade surplus of US $463.9 million, from US $283 million in 2013.
He said import growth had been strong and was approximately 18 per cent while the exports growth was 13 per cent between the first quarter of 2014 and the fourth quarter of 2013.
“If we compare the first quarter of this year with the first quarter of 2013, then exports grew by 14 per cent. Exports were $2,976.9 million,” Mr Kandeta said.
On foreign exchange, Mr Kandeta said the Bank of Zambia had taken strong measures and expected the exchange rate to stabilise and to do better and reflect economic fundamentals.