Haabazoka defends loan buyout
By Staff Reporter
Economist Lubinda Haabazoka has expressed disappointment at the public outcry over loan refinancing.
Last week, President Edgar Lungu asked his Turkish counterpart Recepp Edorgan to help persuade Turkish firms to takeover the US$750 million Eurobond the country subscried to in 2012 which matures in 2022.
Dr Haabazoka argued that what the Patriotic Front administration was planning to do had been done before.
“But one thing I don’t want to be part of is crying over spilled beans! I always want to be part of the solution and not just cry about issues! What government has proposed to refinance the Eurobond using private equity is 100% correct!!,” he emphasized. “Imagine how much tax you need to pay to raise $3bn! Imagine the damage to the economy if we defaulted on capital market debt (Eurobonds)!”
Dr Haabazoka claimed that some overzealous politicians were even calling for the sell of the Eurobond.
“Do they understand the economic impact to the real sector of the economy if we withdrew $3bn from households at once? Please if you don’t know economics, just sit aside and let experts deliberate. No wonder we want to engage stakeholders to ensure that Economics Association of Zambia becomes statutory,” said Dr Haabazoka. “No people should masquerade as economists and send false informational to the market. If it was a vulture fund, they could have bought our bonds on the capital markets (mind you we have no control on who buys our Eurobonds) then waited for us to default and then pounce on us. But they came in to help out. Mind you, experience has confirmed that terms on which refinancing is done are more favorable than the loan being refinanced.”
