Eurozone economic malaise won’t affect Zambia’s Eurobond - Musokotwane

Eurozone economic malaise won’t affect Zambia’s Eurobond - Musokotwane
By Chiwoyu Sinyangwe
Tue 19 July 2011, 14:00 CAT

FINANCE minister Dr Situmbeko Musokotwane says the current economic malaise in Eurozone will not punctuate Zambia’s planned US $500 million Eurobond. Zambia had planned a US $500 million Eurobond next month after receiving a B+ credit rating from Standard & Poor’s.

In an interview, Dr Musokotwane said the Treasury was still doing “paper works” for the bond which sources close to the transaction say would be unlikely issued next month. Dr Musokotwane said there were a lot of alternative sources of finances in the world as emerging economies provided a lot of investment funds.

“If there is gloominess about Europe and all these places, not everyone is always gloomy,” Dr Musokotwane said.

“There are always people who are adventurous and say ‘I have so much money, what am I going to do with it?’ If they can’t put it in euro, now they are looking carefully ‘which part of the world is growing faster?’ So, we can take advantage of that. So, I don’t think that will affect us because the structure for the world economy is changing.”

He said in the last ten years, emerging economies like China and India had come on the scene and were leading the growth of the global economy.

“What you see is that areas which are growing faster are in the developing world led by Asia, and Africa is also coming online,” he said. “What it means is that the investment community, whether they are coming from Asia or from Europe, are focusing much more attention on developing countries because this is where incomes are being made.”

The 17 eurozone nations have been thrown into uncertainty amid a deepening debt crisis which has seen European markets fall repeatedly.

Dr Musokotwane said a small size of domestic economy enables the country to get an economic improvement even from a limited amount of foreign capital.

“For us the goodness is that if you have four, five people out there in the world looking for a place to put their money and those four, five people come with something like K5 billion or K6 billion, by European standard, that’s not very much, but by our standards, the impact on the ground is massive,” he said.

And Dr Musokotwane said the Treasury and key departments will this month review key economic data such as economic growth projections for this year after the World Bank reclassified the country to a lower middle income status.