Economy

Mwanakatwe Sets Record Straight on China Debt Discourse

The Minister of Finance Margaret Mwanakatwe has offered the public answers on the raging discourse around Chinese investments in Zambia.

Mwanakatwe has offered clarifications on the alleged auction of Zambia to the Chinese especially the claim of Zesco being taken over by China.

FULL STATEMENT

For immediate release

SHAREHOLDER STATEMENT ON STATE ASSETS AND LIABILITIES

The Zambian Government HAS NOT offered any State Owned Enterprise to any lender as collateral for any borrowing.

We have noted with concern, a trend by some media outlets and individuals who have chosen to deliberately publish misleading information on Zambia’s economic and debt situation. In particular, I refer to an article published on 3rd September 2018 by the Africa Confidential entitled “Bonds, Bills and ever bigger debt.”

For purposes of this statement, the Laws of Zambia, CAP 349 Minister of Finance [Incorporation], states that the Minister of Finance shall be a corporation sole by that name, with perpetual succession and an official seal, and with power to acquire and hold in that name lands, government securities, shares in any company, securities for money, and real and personal property of every description, to sue and be sued, to execute deeds, to enter into agreements binding on themselves and their successors in office, and to do all other acts necessary of expedient to be done in respect of the above maters or any of them.

In view of the foregoing, I now wish to address a few issues raised in the Africa Confidential Report as follows:

Zambia’s debt and state owned enterprises

As the shareholding Minister in the state owned enterprises that the Africa Confidential Report linked to a debt takeover, and in my capacity as Minister in charge of loan contraction and debt servicing as stipulated in the Loans and Guarantees Authorization Act and the Public Finance Act, I wish to state as follows:

 

  1. There has been NO DEBT DEFAULT BY THE REPUBLIC OF ZAMBIA on our debt obligations to the Chinese Government and other Chinese lenders;

 

  1. The loan at the Kenneth Kaunda International Airport [KKIA] is still being disbursed by the lenders. In this regard, we have NOT yet started repaying the loan because the new airport terminal IS STILL UNDER CONSTRUCTION;

 

  1. The Zesco loans from Chinese lenders relate to the extension project for the Kariba North Bank Power Station and the recently commenced Kafue Gorge Lower Power Station Construction Project, which two stations are INDEPENDENT OF ZESCO as ZESCO only holds shareholding interest in the two power stations through a separate special purpose vehicle. Loan repayments on the Kariba North Bank Extension Project are duly on course while the loan repayments for the Kafue Gorge Lower Power Station have not commenced as the Power Station is still under construction;

 

  1. With regard to the Digital Migration programme, the government obtained a loan from China to ensure that the programme was implemented in the country. This loan is being serviced by the Government and is on course without arrears. Zambia National Broadcasting Corporation was NEVER offered as collateral for the loan. Instead, ZNBC and Start Times of China created an independent special purpose vehicle called Top Star to implement the digital migration programme; and,

 

  1. For all other loans that have been contracted from the Chinese government, the security on the loans is in form of insurance taken from Sinosure and for state owned enterprises an insurance from Sinosure and guarantee from the government are in place. Therefore, NO COLLATERAL IN THE FORM AS ASSETS has been provided for borrowings and none of the guarantees has been called upon.

To insinuate takeover of any asset by the Chinese Government, therefore, IS NOT PRACTICAL AND FEASIBLE. Further, I wish to state that THERE HAS NEVER at any time been discussions of a DEBT/ASSET SWAP between the Zambia and any of its creditors, China inclusive.

Debt service and composition

My Ministry wishes to clarify that in the first half of 2018, a total of US$341.82 million was paid to various creditors as interest payments as opposed to US$489 million which was falsely reported in the Africa Confidential publication. In terms of the external debt composition by type of creditor, Commercial Debt accounts for 53 percent of the debt while that owed to China is less than 30 percent.

Printing of bank notes

Allegations that the Country has been printing more banknotes to increase money supply in the circulation should be dismissed. Contrary to the assertions by Africa Confidential, bank notes are reprinted on well-defined schedules and are done either to replace old notes or to introduce more secure notes to curb counterfeits on the market. We have NO INTENTION to print more banknotes to increase money supply.

Supplementary Budget

I also wish to set the record clear on the supplementary budget. The supplementary budget passed by Parliament HAS NO NEW OR ADDITIONAL MONEY. The figures reflected were mere variation of funds from lower priority or slow moving budget lines to higher priority and positively impactful budget activities.

Conclusion

Whilst members of the public are free to comment on our economy, it is incumbent upon authors that their articles should be ethical, professional and factual. In instances where information is lacking, my Ministry is ready to provide clarity so that publications are not speculative, thereby, causing unnecessary excitement with negative impacts on business and livelihoods in Zambia.

We remain open to provide any extra clarity that stakeholders may wish to raise in this regard.

//Signed//

Margaret D. Mwanakatwe, MP

*Minister of Finance*

45 Comments

  1. km

    Comment mwaumfwa ba minister
    bamyebaka.

  2. Malama

    China need us and we need them too..but Chinese are crooks in nature, they are like snakes so we must be very careful in the way we do business with them. On digital migration, what kind of migration if Zambian
    Iicenced TV stations have to go to court for it to access the platform and yet channels which are not licenced by IBA are on the platform. Topstar in reality have not bring digital migration but Chinese business… These are crooks, they are snakes…if you can’t handle them with the law and courts they treat you like a slave…woe to the poor! Those who can’t afford a lawyer and yet working with Chinese are in reality slaves, mordeden slaves…. Africa, Africa ,Africa why?

    • Mwiya

      I bet all the huge loans we have to be payed in a short time, it will take jubellees I mean more Decades ndishi takoka.

  3. Tito

    If you ready carefully and understand properly what the minister explained she didn’t clarify the mode of repayments in all the loans obtained now the question is are all these loans give to Zambia without repayment conditions she was not supposed to explain how and what but clear the Zambians on how these loans will be serviced I understand any loan obtained carries an assurance of repayments so those are monkey tricks type of defense from the minister but in real sense something is forwarded towards repayment mode

  4. Malama Golden

    The soft loans from China, mostly blinds those in authority and enslaves the poor Zambians. See those who are working with Chinese in reality they are just slaves(modern slavery)… If we are not going to have lawyers to represents all Zambians who are working with Chinese in these projects and Chinese investments then modern slavery is in Africa again. Remember slavery can not work unless few Zambians are benefiting

  5. Malama Golden

    Topstar digital migration is just one crooked mean China has used to take money from Zambian. They brought they business not digital migration… Why Acts television has to beg, fight, go to court just for Topstar to carry its signal…these are crooks, these are snakes

  6. Golden

    Topstar digital migration is just one crooked mean China has used to take money from Zambian. They brought they business not digital migration… Why Acts television has to beg, fight, go to court just for Topstar to carry its signal…these are crooks, these are snakes

  7. jw

    there is no smoke with out fire,Zambians a dull,look to south Africa

  8. Starboy

    When I posted the figures of debts you thought I was joking, look at Srilanka’s harbour has been handed over to the Chinese in exchange for their debts, wake up zambians. In 2026 we will have a Chinese president ruling Zambia, if you don’t believe me, call me I will show you how

  9. Raymond

    If we love our country please let’s help our nation by contributing the least we can ..we are ready to pay even a k50 per household so that we can help our government to pay back the debts we owe yo the Chinese government. Its an appeal to the government

    • Please

      Raymond you must be smoking weed right?

      • Overload

        What he is suggesting is some kind of a poll tax.Africans resisted this tax during colonial times.

    • Nivlek Ocris

      [Proverbs 28:19
      Where there is no vision,the people perish:but he who keepeth the law,happy is he]
      I HOPE WE ALL REMEMBER WHEN OUR PRESIDENT TOLD US THAT HE HAD NO VISION FOR ZAMBIA,WE NEVER LISTENED AND VOTED FOR HIM ANYWAY…..LETS ENDURE OUR CROSS,,,,,,,,SO SAD,goodbye sovereignty,goodbye ZAMBIA

  10. Mary banda

    We have lot of resources which can be given to china. Chinese wants mukula trees. Mukula is on demand to Chinese. Make a deal mrs finance minister.

  11. Bruce Simwanza

    please minister clear internal debts. for how long are you going to be cheating retirees over their benefits more especially those who went on voluntary seperation.

  12. Mc

    Some disgruntled politician they create fake news to win support, just give it two months it will die a natural death. As a nation we have gone through thin and think and we have pulled through, in this situation nothing to worry a bout. Madam Minster we are on course.

  13. Patrick Mwale

    The Minister Of Finance has spoken and we must all listen.The Government Of Zambia has NOT offered any state owned enterprise to any lender as collateral for borrowing,so this rumours speculating on social media that the Chinese has taken over ZESCO is baseless.

  14. Sly

    ZAMBIAN DEBT TO CHINA SO FAR-
    HEROES STADIUM = US $ 94 MILLION..
    .
    KKIA = US $ 360 MILLION..
    .
    SECURITY WINGS HOUSING PROJECT = US $ 275 MILLION..
    .
    KAFUE GORGE LOWER POWER PLANT = US $ 1.7 BILLION..
    .
    KARIBA NORTH BANK POWER PLANT EXPANSION = US $ 430 MILLION..
    .
    LUSAKA L400 ROAD = US $ 300 MILLION..
    .
    NDOLA AIRPORT = US $ 400 MILLION..
    .
    LUSAKA DECONGESTION = US $ 286 MILLION..
    .
    TOPSTAR DEAL-COMMUNICATION TOWERS = US $ 280 MILLION..
    .
    COPPERBELT ROADS C400 = US $ 418 MILLION..
    .
    CHIPATA-SERENJE RAILWAY LINE = US $ 2.3 BILLION..
    .
    MONGU-KALABO ROAD = US $ 287 MILLION..
    .
    2,000 MILITARY HOUSES = US $ 157 MILLION..
    .
    MANSA-LUWINGU ROAD = US $ 242 MILLION..
    .
    MBALA-NAKONDE ROAD = US $ 180 MILLION..
    .
    LUSAKA SANITATION PROJECT = US $ 130 MILLION..
    .
    KAFUE WATER PROJECT = US $ 104 MILLION..
    .
    LEVY MWANAWASA HOSPITAL EXPANSION = US $ 90 MILLION..
    .
    KAFULAFUTA DAM WATER PROJECT = US $ 449 MILLION..
    .
    MULUNGUSHI COMFERENCE CENTRE EXPANSION PROJECT = US $ 30 MILLION….
    .
    .
    TOTAL = US $ 8,542,000,000 ( EIGHT BILLION FIVE HUNDRED AND FORTY-TWO MILLION ) in UNITED STATES DOLLARS
    HOW ARE WE GOING TO PAY OFF THIS DEBT?

    • Kays

      There is no debt that can’t be settled, in one way or the other everyone is indebted in a way

  15. Teeth teeth

    @Raymond, don’t say we , rather say I , please if you don’t have any use for your money,go and help your government.

  16. Baldwin Zulu

    Good or bad we should be careful

  17. Kays

    The honourable minister has spoken and it’s all clear to every positive reasoning citizens, media houses etc. Information is vital and needed all the time, but only factual information will carry weight, truth be told, media houses please disseminate real information and not one that brings about excitement negatively, that one has failed the economy when in the actual since true facts are bypassed. Seek the truth and facts before making your publications.

  18. C3

    These pipo ar cheating on us bcoz they ar o cluks, we nid to wakup and stik to one thing/mind, athawise we ar doomed

  19. Mr. K

    These members of parliament outside parliament will never form government our minister has put things straight where even a layman can easily understand instead of condemning the Africa confidential magazine for lying about Zambia’s debts with China their debate is to promote their hidden agenda which is going to state house by all means

  20. The eye🧐

    Thieves, incompetent thieves!!

  21. Zambian

    Ba slay shene shi shafulisha mwandi, nangu ni development awe, its too much everything nimuli kaloba? Am afraid we are in a big problem no wounder these taxes are coming like a burning fire, its a song of the day pa ZNBC tayilafika napa chorus. Wapya mudzi malume.

  22. KALAMPA NINEBO

    SO WHAT COMFORTING ABOUT THIS HON DORA SILIYA?THE NAKED FACT IS THAT ZAMBIA HAS ACCRUED ASTRONOMICAL DEBT TO CHINA NO WONDER THE CHINESE KILL AND TORTURE LOCAL PEOPLE HERE.SAD REALITY IS THAT MANY ZAMBIANS ARE DOCILE AND STILL IN UTOPIA SLUMBER.THE SAME THING HAPPENED IN THE ZAMTEL AND FBZ SAGAS,DORA AND HER HENCHMEN DENIED SALES OF THE AFOREMENTIONED BUT WHEN PF CAME INTO POWER IT WAS ALL LAID BARE LIKE A NAKED PROSTITUTE!SO NOW WE HAVE THE SAME DEJAVU SCENERIO AND GUESS WHO IS BUSY DENYING ON BEHALF OF GOVERNMENT?DORA SILIYA AS USUAL!

  23. KALAMPA NINEBO

    SO WHAT IS COMFORTING ABOUT THIS HON DORA SILIYA?THE NAKED FACT IS THAT ZAMBIA HAS ACCRUED ASTRONOMICAL DEBT TO CHINA NO WONDER THE CHINESE KILL AND TORTURE LOCAL PEOPLE HERE.SAD REALITY IS THAT MANY ZAMBIANS ARE DOCILE AND STILL IN UTOPIA SLUMBER.THE SAME THING HAPPENED IN THE ZAMTEL AND FBZ SAGAS,DORA AND HER HENCHMEN DENIED SALES OF THE AFOREMENTIONED BUT WHEN PF CAME INTO POWER IT WAS ALL LAID BARE LIKE A NAKED PROSTITUTE!SO NOW WE HAVE THE SAME DEJAVU SCENERIO AND GUESS WHO IS BUSY DENYING ON BEHALF OF GOVERNMENT?DORA SILIYA AS USUAL!

  24. HOMMIE 24

    this country has become sobibo,, its either u escape or u die in sobibo

    • Thunderman

      You are right.Its quite funny but this is very real.Harsh times to live in.Its as good as a recession.Escape or die.

  25. mwale

    The facts have been set on the table.Don’t argue.

  26. Changwe

    The reason why there is mixed information is because the government doesn’t inform the public who the real government to all economic decisions they make for the citizens. Why making economic decisions confidential like if they are personal activities. Let me urge the people with authority to be transparent to all economic decisions for the people as citizens are directly affected negatively or positively to that.

  27. Kasonde

    My question to the finance minister is, since you have stated clearly that zesco is not a major shareholder in the two power projects can she tell the zambian people as custodians of these assets who owns the two power projects and ba minister provide full details of who owns these two infrastructure because from my education certain assets such as power assets world over are treated as national security assets and should be owned mostly by states or indigenous citizens not foreigners those who have studied international relations will understand this. Waiting for the reply madam Minister.

    • Truth man

      The two Projects i.e Kariba north bank is owned by Zambia while the South is owned by Zimbabwe. Construction was done jointly by both countries.Go back to your civics notes at any library in Zambia.

  28. Alidy

    Our resources are being taking by colonial master,,,, with our eyes widely open,, walk up zambia don’t slumber,,,,we have long way to if you know you have failed let other people control that nation,,,,,, its really painful to our future generation who will pay the loan they don’t know….

  29. Innocent mudenda

    Just destroy this nation in the name your greediness and selfishness.kill us

  30. Stanley

    Commen life is very difficult when you are blind, we have other loans that we are suppose to pay and yet we still go for more loans

  31. stanley

    going back to slavery tefintu

    • Thunderman

      We only read about it in books buts its slowly unfolding in our times.Scarcity of jobs and huge sums of debt.

  32. Alfredgrp

    Zambians don’t be fooled how come every project in Zambia progress when we borrow money and don’t tell me we can’t develop our country with our country income money these guys are crooks so zambians wake up before these guys give our Zambia as surety.

    • Thunderman

      They have already done so..We are just waiting for an enforcement.
      Zambia is Sorbibor in the making,escape now or Die.

  33. Princess

    I really don’t want us to keep playing around with the Chinese, we may be at the losing end at last. It is time the Zambian government switched their attention to the national development of this great nation. There are currently lots of insurance agents whereby 89% are from the Chinese investment banks. We just have to wake up.

  34. inno

    pliz wat z de work of sodiers work on it save us for now ur job as come .we have more money in zambia and more workers. dont u just let dem stay for a while just for two months so dat we can use dere salalies to pay back. i think it can work .

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