CSPR demand Transparency in Eurobond Buyback

By Francis Maingaila ♥️

Lusaka, Zambia24, (June 5, 2026) – The Civil Society for Poverty Reduction (CSPR) has called on the Government to provide full details of its planned US$1.36 billion Eurobond buyback, warning that the transaction must be handled with transparency, accountability and caution.

CSPR Executive Director Isabel Mutembo Mukelabai said the operation involves the repurchase of Zambia's restructured Eurobond using a US$600 million loan from the African Development Bank (AfDB) alongside Government resources.

Mukelabai said the transaction could benefit Zambia by retiring a costly debt instrument whose interest payments would have increased over time until 2053.

"The step-up structure of the Eurobond meant that debt service costs would continue rising. Buying back the bond now could help reduce future repayment pressure and improve debt management," Mukelabai said.

She added that replacing part of the Eurobond with more favourable financing could strengthen investor confidence and support the country's long-term fiscal stability.

Mukelabai also said the debt-for-energy component linked to the AfDB-supported Grid Resilience Programme could help improve electricity distribution and reliability, supporting economic growth and recovery.

However, she cautioned that Zambia remains at high risk of debt distress and that any new borrowing should be carefully scrutinised.

Mukelabai said CSPR is concerned that Government has not explained where the remaining financing for the buyback will come from beyond the US$600 million AfDB loan.

"The public deserves to know how much Government will contribute, whether the money will come from reserves, and what impact this will have on public finances," she said.

Mukelabai further questioned whether the transaction is covered under the approved 2026 National Budget and the amended Annual Borrowing Plan.

She noted that the amended borrowing plan refers to an AfDB loan for the Lobito Corridor Project but does not mention a US$600 million facility for the Eurobond repurchase.

"This raises important questions about transparency and parliamentary oversight because Government is taking on a major financial commitment that does not appear in the approved borrowing framework," Mukelabai said.

She also pointed out that while the 2026 Debt Sustainability Analysis recognised liability management operations as a policy option, the specific Eurobond buyback was not included in the debt projections.

Mukelabai warned that without full disclosure, it would be difficult for citizens and oversight institutions to determine whether the transaction offers value for money or creates new financial risks.

She said potential risks include replacing one debt burden with another, putting pressure on foreign exchange reserves, weakening the Kwacha through large foreign currency outflows, and reducing public confidence if the process is not transparent.

"The operation may improve the debt profile in the short term, but it must not create new long-term vulnerabilities," Mukelabai said.

CSPR has called on Government to publish the full financing structure of the buyback, including the terms of the AfDB loan, the amount of Government resources being used, and the total cost of the transaction.

Mukelabai also urged the Ministry of Finance to release an updated Debt Sustainability Analysis showing the impact of the buyback on public debt, future repayments, fiscal stability and exchange rate risks.

She further called on the Ministry of Finance and the Bank of Zambia to provide regular public updates on the transaction and its effects on reserves, debt management and exchange rate stability.

"Debt operations of this scale must strengthen public confidence and contribute to a sustainable and development-oriented debt strategy that benefits all citizens, especially the poor and vulnerable," Mukelabai said.