Sat, 19 Nov 2016 10:27:45 +0000
ANY new borrowing should be aligned to Zambia’s capacity to repay and on terms that will not unjustifiably expose the country to preventable risk of defaulting, says Professor Oliver Saasa. Prof Saasa said Government’s intentions during 2017 to undertake numerous measures to enhance debt management were commendable and would help in keeping debt to manageable and sustainable levels.He was speaking at the post-Budget meeting organised by Deloitte Zambia in Lusaka.
“In this regard, the Government should strive to ensure that the possibility of arrears’ accumulation due to bad loan or external-financed investment decisions is eliminated,” he said.Prof Saasa explained that this would involve closer monitoring of how loans were being applied as it would require the provision of more debt oversight authority to Parliament through legislative review.
He said a better debt strategy primarily anchored on a more comprehensive medium-to-long-term view of fiscal risks arising from the public sector was needed.He explained that the current external debt policy focussed mainly on the immediate contractual obligations.“Presently, the solicitation of an IMF-supported programme seems to be a good option to the Government, the more reason why a debt management strategy should be in place to guide discussions with external parties,” he said.
And Minister of Finance, Felix Mutati, said Government was working on a comprehensive debt sustainability for next year which would guide on how much Government might borrow.Mr Mutati also said the strategy would also guide Government on what it could refinance or what could be postponed.The minister also emphasised that Zambia was not in a debt trap.“We are doing a comprehensive debt sustainability for next year that will guide us either how much more we can borrow, what we can refinance or what we can postpone.
We are not in a debt trap. If there is something we do well, is to pay our debt on time even in the last five years,” he said.And Deloitte Zambia managing partner, Chisanga Chungu, said he was optimistic that current economic challenges would be overcome with collective resolve and resilience.