by Frost And Sullivan, Mining Research Analyst, Yeukayi Kadzere

The Eurobond effect

Zambia will require billions to meet infrastructure deficit

Zambian government to use Eurobond funds for infrastructure development
development.jpg

Zambia’s sound macro-economic policies and political stability have helped create an environment that encourages investment.

Foreign direct investment initiatives, however, often fail due to low levels of infrastructure development, a weak currency and skilled labour shortages in the recipient country.

One of Africa’s biggest challenges is its infrastructure deficit, which slows down growth and development of the continent. Infrastructure constraints make inter-regional trade very expensive as supply chain management and freight logistics become challenging.

Africa requires more roads, railways, ports and bridges to optimise its natural resource extraction, guaranteeing stability of inter-regional trade and, ultimately, improving the socio-economic state of its countries through job creation.

Zambia is no exception, with current road and rail infrastructure inadequately supporting the mining and manufacturing sectors.

On 13 September 2012, the Zambian government raised $750 million through a Eurobond. Debt, in the form of a bond, allows the government more discretion over how funds will be utilised.

Initial indications from the government point toward the funds being utilised for infrastructure development.

The country will, however, need to address its power shortages, road and rail transport challenges, as well as social infrastructure deficit, among others.

Zambia’s infrastructure needs currently far outweigh that which the Eurobond can achieve, as it needs to spend at least $13.2 billion over the next five years in order to meet its infrastructure deficit.

 

comments powered by Disqus

R1
R1
R1

This edition

Issue 38
Current


Archive


Energy_Magazine The World Bank Will Stop Fossil Fuel Financing Beginning in 2019 https://t.co/7OIJSRblIs https://t.co/8tWhbne58Y 4 days - reply - retweet - favorite

Energy_Magazine NEW APPROACH: Riccardo Temmers, CDC Acting Executive Manager Centre of Excellence gives his opinion on the Energy… https://t.co/oVhOTAkDPy 8 days - reply - retweet - favorite

Energy_Magazine There's still time to secure your seat at the 2018 Tomorrow's Leaders Convention taking place at at Emperor's Palac… https://t.co/sCPbjf0XT7 2 months - reply - retweet - favorite

  • Jerome Imbriolo
  • Terrence Damster
  • Francois Marius
  • Thato Tlale