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Zambia promises to honor debt obligations, denies vulture funds-related reports

Xinhua, March 19, 2016 Adjust font size:

The Zambian government on Friday pledged to honor its debt obligations, denying reports that it has received unsolicited offers from foreign investment agents, known as vulture funds, wanting to buy off the country's external debt.

"The government is fully committed to the conditions and principles under which the debts were contracted. This means that government will remain in the international debt market and honor all its obligations as they fall due," Secretary to the Treasury Fredson Yamba said in a statement.

The government has no plans to sell any of its debt to any investor and its resolution can be seen through the establishment of a Sinking Fund to deal with any future risks of repaying its Eurobond debts when they mature, Yamba said.

He added that the government is further developing a Medium-Term Debt Strategy to ensure that it has a coherent and well-structured way of dealing with debt and its associated risks.

He said the assertions that the government was planning to sell its external debt after realizing it was a mistake to borrow from the commercial capital market were unfounded and misleading,.

Zambia has contracted three Eurobonds worth 3 billion U.S. dollars: 750 million dollars in 2012, 1 billion dollars in 2014 and a 1.25 billion dollars last year. Endi