ZICA Adds Voice to Eurobond Sinking Fund Concern

Again showing that concern regarding the sustainability, size and coherence of Zambia’s debt position is not only growing in international circles, but is reflected in the statements and warnings of major domestic organisations, the Zambia Institute of Chartered Accountants (ZICA) has questioned Zambia's ability to repay the Eurobonds due in 2022, 2024 and 2025 to 2027.

While in an address to media this week ZICA President Jason Kazilimani made clear that ZICA welcomed the establishment of a Sinking Fund to prepare for repayment, as well as the initial allocation of K536.2 million, he also noted concerns regarding the erratic and obscure nature of preparations, stating: “Since its inception, budget allocations to the Sinking Fund have consciously been missing for the past three fiscal years and there has been no publicly available information on the Fund. This raises the question of the country’s ability to repay the bonds as they fall due and increases the repayment risk that could s signal to bond holders that we are likely to default on the debt. The increased repayment risk would also translate into a higher interest rate on future borrowings.”