By BUUMBA CHIMBULU
GOVERNMENT has launched a tool which will tackle the accumulation of debt in local authorities, as it reviews the National Authority and Pensions Act to make it less punitive regarding statutory obligations.
The Debt Management Strategy provides a framework for local level borrowing and debt management.
Total combined accumulative debt for all local authorities as at June 30, this year stood at K2.8 billion.
This level of debt is worrying and poses real challenges and risks to local authorities and associated institutions, said Finance Minister, Bwalya Ng’andu yesterday in Lusaka during its launch.
Dr Ng’andu expressed concern that the debt level if not revised was potentially disruptive with far reaching negative consequences such as contributing to general macroeconomic instability and placing a huge financial burden on the Treasury.
Dr Ng’andu explained that the document had been developed to liquidate existing debt, guide future of debt and ensure debt sustainability as well as enhance debt management capacity.
To support the objectives, he said, some key activities which would be undertaken included reviewing of the NAPSA Act of 2015 to make it less punitive regarding statutory obligations.
As of June 30 this year, statutory obligations debt showed that NAPSA accounted for the largest share at K1.35 billion out the K2.8 billion debt for the local authorities.
Secretary to the Treasury, Fredson Yamba, said his office had been taking particular interest in debt and borrowing in the local authorities.
Mr Yamba said: “We want to ensure that there is a vertical balance across central and local Government levels between their expenditures, responsibilities and revenues.”
Local Government Minister, Charles Banda, said his ministry had engaged LASF, NAPSA and ZRA to liquidate the statutory debt which was key to the implementation of the strategy.
Dr Banda urged local authorities to create the strategy as a tool that would guide how to halt the accumulation of debt and dismantle the existing debt.
