‘Zambia Still Owes Brazil, China, Iraq’

SECRETARY to the Treasury Fredson Yamba says Government has not serviced the US$296 million debt owed to Brazil, China and Iraq as at December 2012.
Mr Yamba said Brazil, China and Iraq are the only three remaining bilateral creditors that are yet to deliver their share of debt relief amounting to US$296,768,971.89 to Zambia under the highly indebted poor countries (HIPC) initiative.

He said this last Friday when he appeared before the Public Accounts Committee (PAC) to answer queries cited in the Auditor General’s report for the financial year ending December 31, 2012.
“As of December 2012, Government owed a total of US$296,768,971.89 as outstanding debt including arrears to the three creditors. Of this outstanding debt, US$111,309,845.18 was owed to Brazil, US$23,828,320.71 to China and US$161,630,805 to Iraq,” Mr Yamba said.
He said to resolve the outstanding debt, Government has been negotiating with governments of Brazil, China and Iraq with a view to signing bilateral debt relief agreements, which will stipulate the mode of effecting debt forgiveness under the HIPC initiative.
Mr Yamba said Government and Brazil agreed that Brazil was to deliver to Zambia a write-off of 80 percent of the debt by August 1, 2011, which stood at US$111,309,845.18 and the relief translated to US$89,047,876.14.
“The remaining 20 percent will be rescheduled at an interest rate of six months LIBOR plus one percent. Therefore, Government will only pay US$22,261,969.04 instead of US$111,309,845.18,” he said.
Mr Yamba said in the case of Iraq, the two governments have agreed to settle the outstanding debt under the Cologne Terms debt write-off framework.
He said under the Cologne Terms agreement, Iraq will cancel 90 percent of the outstanding debt, meaning Zambia will only pay 10 percent of the debt amounting to US$16,163,080.50 and not US$161,630,805.
Mr Yamba said for China, in 2011 the Chinese government through a protocol delivered partial debt relief by cancelling 50 percent of the debt.
He said Government has commenced negotiations with the Chinese government on the cancellation of the remaining 50 percent and it is expected that the negotiations will be completed this year and a debt relief agreement signed next year.

Posted by Editor on May 12, 2014. Filed under LATEST NEWS. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.