Finance Minister Margaret Mwanakatwe has emphasized that there has been no debt default by the Zambia Government on the debt obligations to the Chinese Government and other Chinese lenders.

The Finance Minister also in a statement issued to Money FM News says the Zambian Government has not offered any State Owned Enterprise to any lender as collateral for any borrowing.

This follows an article published on 3rd September 2018 by the Africa Confidential entitled “Bonds, Bills and ever bigger debt.”

In the article, Zambia is said to have sold some public assets including national broadcaster ZNBC, ZESCO and Kenneth Kaunda International Airport.

Ms Mwanakatwe categorically states that the loan at the Kenneth Kaunda International Airport (KKIA) is still being disbursed by the lenders and that the government has not yet started repaying the loan because the new airport terminal is still under construction.

“The Zesco loans 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,” she has disclosed.

She adds that 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.

“With regard to the Digital Migration programme, the government obtained a loan from China to ensure that the programme was implemented in the country. 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 Start Times of China created an independent special purpose vehicle called Top Star to implement the digital migration programme,” she said.

Ms Mwanakatwe states that for all other loans that have been contracted from the Chinese government, the security on the loans is in form of insurance taken from Sinosure and for state owned enterprises an insurance from Sinosure and guarantee from the government are in place.

“Therefore, no collateral in the form as assets has been provided for borrowings and none of the guarantees has been called upon,” she maintains.

The Finance Minister has also clarified that 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.

Ms Mwanakatwe says 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.