FINANCE MINISTER SETS RECORD STRAIGHT

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By NATION REPORTER

THE Zambian Government has not  offered any State-owned enterprise to any lender as collateral for any borrowing contrary to speculations fueled by false media reports, Finance Minister, Margaret Mwanakatwe has said.

Ms Mwanakatwe also disclosed that there had never  at any time been discussions of a debt/asset swap between  Zambia and any of its creditors, China inclusive.

In a statement to the Daily Nation, the minister 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.”

She explained that as Finance Minister, she was  legally bound to contract loans on behalf of the government, and was not aware of any government entity being given as collateral for any loan.

Ms Mwanakatwe said contrary to media reports, there has been no debt default by the government on our debt obligations to the Chinese Government and other Chinese
lender

The minister, who is also  the shareholding Minister in the state-owned enterprises and  in charge of loan contraction and debt servicing as stipulated in the Loans and Guarantees Authorisation Act and the Public Finance Act, said the  loan at the Kenneth Kaunda International Airport KKIA was 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,” she said.

The Zesco loans, she said,  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,” she said.

The minister also explained that with regard to the Digital Migration programme, the government obtained a loan from China to ensure that the programme was implemented.

“ 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 Star Times of China created an independent special purpose vehicle called Top Star to implement the digital migration programme,” she explained.

The minister also explained that for  all other loans that have been contracted from the Chinese government, the security on the loans was in form of insurance taken from Sinosure and for state owned enterprises an insurance from Sinosure and guarantee from the government were in place.

“Therefore, no collateral in the form of assets has been provided for borrowings and none of the guarantees has been called upon,” Ms Mwanakatwe  said.

She also clarified that with regard to debt service and composition,  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.

The minister also rubbished assertions that the country had been printing more banknotes to increase money supply. She maintained that the government had no intention of printing more banknotes to increase money supply.

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