Zambia’s debt climbs to $31 billion
Written by MRadio on April 8, 2022
By OLIVER SAMBOKO
Zambia’s foreign and domestic debt had reached $31 billion as at December 2021, Finance and National Planning Minister Situmboko Musokotwane disclosed yesterday.
He made the disclosure during the first quarter budget and economic performance review held at Mulungushi International Conference Centre in Lusaka.
Dr Musokotwane said the local and foreign debt has been converted into US dollars and at December 2021, reached $14.5 billion for domestic and foreign debt at $27 billion.
He said the domestic debt consists arrears owed to suppliers, Treasury bills and other payments.
Dr Musokotwane said that to ensure transparency and that payments are being made for value for money, Government is in the process of undertaking a comprehensive audit of domestic arrears on Farmer Input Support Programme, fuel, VAT, use of goods and services, road contracts.
He revealed that by the end 2021, the domestic debt had gone up while the foreign debt came down.
Dr Musokotwane warned that as long as the country remain highly indebted, it will be very hard to have a functioning economy more especially that the foreign debt has to be serviced in dollars.
He however, said the new dawn administration is committed to dismantle all the debt and bring the country to prosperity.
“This will be done under the IMF framework,” he said.
Dr Musokotwane said the IMF programme will allow Zambia to pay back without clipping its economy.
He said he is hopeful that by mid this year the agreement with the IMF will have been concluded and signed, adding that IMF loan has zero cost and payable for a period of 10 years. On debt restructuring, Dr Musokotwane said the government has already undertaken and finalised the Debt Sustainability Analyses which has indicated the quantum of support required in debt relief from creditors.
He also said global development has resulted in an escalation in oil prices not only in Zambia but worldwide.
Dr Musokotwane said last year, oil prices averaged US$68 and US$75.24 per barrel but that following the Russia-Ukraine crisis that led to a disruption in oil supplies, prices have increased to around US$140 per barrel, the highest in 14 years.
He said the international oil prices have had an adverse effect on the pump prices of petroleum globally and Zambia has not been spared.
