FLOAT KANSANSHI SHARES TO OFFSET EUROBONDS, STATE ADVISED
GOVERNMENT should sell 10 percent shares from ZCCM-IH to pay off its three Eurobonds, Zambia Institute for Policy Analysis and Research (ZIPAR) Research Fellow for Public Finance, Shebo Nalishebo, has suggested.
Mr Nalishebo said Government should take up the offer to sell ZCCM-IH shares in Kansanshi Mine to mobilise revenue needed to pay back the loans.
He said the estimated total mineral reserves at Kansanshi Mine was 642 metric tonnes, with average ore grades of 0.62 percent, which meant that large amounts of revenue could be generated from there.
He said with a potentially large base of valuable assets, Government may be in a position to sell non-essential assets and use proceeds to pay down Eurobond debt as another short term financing option.
Mr Nalishebo was speaking last week in Lusaka at the Public Debt Symposium.
“Just off-loading 10 percent ZCCM-IH shares is enough to pay off all three Eurobonds,” Mr Nalishebo said.
Zambia’s three Eurobonds are US$750 million, US$1 billion and the US$1.25 billion.
Mr Nalishebo said this was among the short term financing options for ambia for its loans.
He also said Government should use revenue from road tolls to pay back its debt as a short-term financing option.
Mr Nalishebo observed that revenues from road tolls had consistently been above target since introduction.
“Given that infrastructure should be able to pay for itself, it is about time we realised that money from tolls should be used to pay back the loans,” Mr Nalishebo said.
About K1 billion has been projected to be collected from toll gates by end of this year by the National Road Fund Agency.
Mr Nalishebo also advised Government as a short term financing option for its loans to work on mechanisms to issue a specific infrastructure bond.
This, he explained, would be used to raise money locally to avoid exchange rate risks.
Mr Nalishebo said institutional investors presently dominated the domestic bond market.
“Given that infrastructure should be able to pay for itself, it is about time we realised that money from tolls should be used to pay back the loans.”