Zambian delegation begins roadshow for $2 billion Eurobond issue
A Zambian delegation is currently on a roadshow with the intention of raising $2 billion to help plug the budget deficit as well as complete key capital projects. External debt currently stands at $4.8 billion – approximately 18% of Gross Domestic Product (GDP). Total debt is stands at $8.5 billion, 32% of GDP:
Investors will be wary of the risks posed by continued depreciation of the Kwacha, low global copper prices, the current energy deficit and how much impetus there is to sort out current fiscal issues while remaining disciplined as the 2016 general elections quickly approach. This of course is all considered with respect to how it could affect Zambia’s ability to service its debt.
On the flipside, investors will have a positive view of the infrastructure projects being undertaken, the country’s long-term upside and the fact that they will still have low to moderate debt at around 39% of GDP after the new issuance. The Government has also demonstrated an impetus to grow tax revenues (via rental income tax enforcement), setting up of a sinking fund and the central bank continuing to take appropriate monetary policy action to keep inflation in check.
There will definitely be demand for Zambia’s third Eurobond offering but will ultimately be dictated by what yield is on the table. There has been no mention yet about what yield the offering is being marketed at.
AFDB approves $243 million loan for Chinsali-Nakonde road project
THE African Development Bank (AfDB) has approved US$243 million loan for the rehabilitation of the Chinsali-Nakonde Road. AfDB officer in charge for Zambia Philip Boahen said his bank will provide US$193 million and a US$50 million loan from the Africa Growing Together Fund (AGTF). This will support the rehabilitation of the Chinsali –Nakonde Road. (Read more)
China is Zambia’s largest investor
A senior Zambian government official said China has now become the largest investor in the southern African nation with Chinese investment having now reached more than US$5.3 billion, the Times of Zambia reported on Wednesday. Siazongo Siakelenge, the permanent secretary in the Ministry of Commerce, Trade and Industry, said about 280 Chinese enterprises were now operating in Zambia, making the Asian nation the largest investor in the country. (Read more)
Court rules against Rajan Mahtani in Zambezi Portland Cement case
In what has been one of the longest running business disputes in Zambia, the family of Antonio Ventriglia secured an important legal victory this week against the former Chairman of Finance Bank Rajan Mahtani, whom they accuse of illegally attempting to steal a majority shareholding in Zambezi Portland Cement Ltd. (Read more)
Government releases funds to pay TAZARA workers
Tanzania Zambia Railway Authority (TAZARA) Public relations officer Ernest Mwape has confirmed that government has released funds to pay four months’ salary arrears for the company workers in the country. Mr. Mwape who confirmed the development in a press statement made available to ZANIS in Kasama today said the workers have since resumed work. (Read more)
Minister of Commerce sets June 2016 as deadline for launch of National Airline
Government has reiterated that it will soon revive the national airline to meet the country’s growing aviation needs. Minister of Commerce, Trade and Industry Margaret Mwanakatwe said government was eager to re-establish a national flag carrier to facilitate the process of linking the country to the rest of the world. Mrs. Mwanakatwe said this in response to inquiries from the Mauritius government about the lack of a direct flight between Zambia and that country to promote trade and tourism. (Read more)
Trying to decipher this puzzle that is Zambia by using a variety of publicly available data (structured and unstructured) in conjunction with my own skill/experience. * * *