ZAMBIA: Move on refinancing Eurobonds in 2019

Due to traumatic jump of national debt, finance Permanent Secretary Mukuli Chikuba has revealed that Zambia will begin refinancing Eurobonds worth $2.8 billion in 2019.Zambia’s debt rose from 35 percent of GDP to 60 percent between 2015 and 2016 partly due to the Eurobonds, which were issued from 2012 to 2015.Debt refinancing involves a process where a country or an organisation reorganizes its debt by replacing or restricting its existing debts using funds raised by issuing fresh debts.

Mr. Chikuba said the financing of the Eurobonds was expected reduce the cost of debt servicing for the country. He added by saying that “We are remaining with just a few more years before the first Eurobond is due. By 2019 or so we will start the refinancing,”
It is expected that ,Zambia would either buy back the debt in Zambia’s name or find other investors to do so over a longer period.

Zambia and the IMF agreed in October to chart a new path towards debt sustainability after the IMF delayed the conclusion of talks with Zambia saying it was at high risk of debt distress.
Last Thursday, IMF Director of Communications Gerry Rice told a media briefing in Washington D.C that the Fund put the negotiations for a Zambia bailout package have been put on hold due to Zambia’s high borrowing plans.