Zambia hopes to agree on key conditions for restructuring $3 billion of its bonds no later than the first quarter of 2024, Secretary to the Treasury Felix Nkulukusa said on Thursday. Debtor countries are meant to agree comparable restructuring deals with official and commercial creditors under the G20’s Common Framework process, which was established in 2020 in response to the COVID-19 pandemic. “Before we go to the (bondholder) steering committee, we have to agree on what we mean by comparability of treatment,” Nkulukusa said. “This should be concluded not later than the first quarter of 2024,” he added. In a major setback for Zambia, its official creditors, which include China and members of the Paris Club of creditor nations, rejected a preliminary restructuring deal in November. They argued that the deal with bondholders, which was approved by the International Monetary Fund (IMF), did not offer comparable debt relief to what they were offering. Read more: Reuters
Canadian miner First Quantum Minerals is in talks to sell a stake in its Zambian copper mines to Chinese state-owned Jiangxi Copper Corp, aiming to bolster the company’s finances, a person familiar with the matter told Reuters. Details are yet to be finalized and it was not clear whether the latest talks would lead to a transaction, the person said. The talks began last month after First Quantum suffered a major blow in Panama, where it was ordered to shut one of the world’s biggest copper mines, which debt rating agency Fitch has warned could hurt the company’s borrowing capacity. In Zambia, First Quantum wholly owns the Sentinel mine and 80% of the Kansanshi mine, with the rest owned by the Zambian government. Jiangxi, First Quantum’s top shareholder, could end up buying one of the two mines or a stake in one of them, the person added. “The Chinese want the Zambian mines … so the company (First Quantum) could sell one of the Zambian mines,” the source said. Reuters
Strong capital adequacy position supported Zambia’s banking industry which reportedly remained satisfactory in 2023. Zimba explained that the primary capital adequacy ratio was at 23 percent, and total regulatory capital adequacy ratio was at 23.7 percent as at end October, 2023, Responding to a press query, Zimba stated that this was well above the minimal regulatory benchmarks of five percent and 10 percent, respectively. “This strong capital position is well supported by the continued profitability through retained earnings. In the month under review, the sector continued to be profitable and recorded a profit before tax (PBT) of K1,024.8 million, which is 9.9 percent higher than the previous month’s PBT,” she said. According to Zimba, the profit was primarily attributed to interest income from loans and advances as well as government securities. This reflected the sector’s resilience and capacity to absorb unexpected losses, according to the Bankers Association of Zambia (BAZ) Public Relations and Administrative Officer, Mirriam Zimba. Read more: Zambia Monitor
Government says it will not abruptly stop borrowing to ensure debt sustainability, as it announces plans to borrow K33.3 billion this year which will mostly come from the domestic market. This is according to the Finance and National Planning Minister, Situmbeko Musokotwane, at the 2024 national budget media briefing in Lusaka on Thursday. The Minister clarified that the K33.3 billion was relative to the size of the economy. While announcing the gradual decrease in borrowing, Musokotwane took the opportunity to encourage members of the public not to pay attention to those attacking government on its continued borrowing. Read more: Zambia Monitor
|