Politics

CTPD calls for re-financing of Eurobond

The Centre for Trade Policy and Development has proposed that government re-finances the $3 billion Eurobond and renegotiate over $2 billion of Chinese debt.

And CTPD is further urging the creation for a separate department to manage the sinking fund currently overseen by the Ministry of Finance.

CTPD researcher Bright Chizonde said that in the medium term, the country should engage with the International Monetary Fund (IMF) to develop a credible borrowing plan and enhance the economic recovery program.

“In order to weather the storm of the rising public debt, Zambia should restructure its debt in order to mitigate the depletion of foreign reserves, reduce the projected rise in inflation, control the depreciation of the kwacha, reduce interest rates and stimulate more growth,” Chizonde said at the launch of the debt study in Lusaka today.

On the sinking funds, which periodically sets aside money for the gradual repayment of debts, figures show that it currently stands at over US$10 million.

Chizonde said with improved accountability and transparency, the figure could be higher to help Zambia avoid a debt crisis.

“There is urgent need to free up resources for social service provision towards health, education and social security,” Chizonde said.

5 Comments

  1. family man

    They only think and care about their selfish being, so they can’t take that advice

  2. DEEP THROAT

    The matters raised by the researcher are important and urgent. But is there anyone listening?
    First of all, there is no need of creating s department for the management of Annual Sinking Funds (ASF). The budget department can detail one or two people to implement it under the surpevision of the detector.
    The most difficult issue here is, where would the funds for the ASF Account come from? I assume that we all understand how an ASF operates. It really means as you pay your monthly or yearly installments, you set aside an equivalent amount at the same time. The result will be that as you finish your repayments, you have an equivalent amount reserved in your ASF Account.
    But what would be the purpose of ASF? To me, it means that if you had borrowed to build roads for example, at the end of the repayment period, you need not borrow again as you have already made the provision through the ASF.
    Government can easily find this money through company taxation by removing the RETENTION POLICY ON EXPORTS. All funds would be returning to the country, and ALL exporters would paying correct taxes unlike now when they all declare loses.
    All these South African chain stores would be doing their accounting systems and paying salaries including PAYE in Zambia.
    These measures and the much delayed introduction of Sales Tax would afford government enough funds for such a scheme.
    If government were a little reasonable would introduce a small Capital Gains Tax on sales of second hand motor vehicles etc at say 5% to raise such funds. But, for luck of accountability, thefts and corrupt practices, one dare not encourage such measures.
    Yes, our researcher needs to go a little deeper.

  3. Elephants

    Tutambako chabe

  4. FGM

    The Zambian economy is on its knees because of; # rampant corruption. # failure to timely pay agro dealers and farmers. # delays in paying retirees. # failure to timely pay Zambian suppliers and contractors. # sidelining of Zambian contractors. As a rresult there is no money in circulation. Shame indeed!!!!!

  5. Mulenga

    Timely advise

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