Govt wont default on loan repayments – Mutati

Sun, 04 Feb 2018 11:53:16 +0000

By BUUMBA CHIMBULU

Minister of Finance, Felix Mutati has assured the nation that Government would not default on its debt repayments as it had the capacity to pay back the contracted loans.

Mr  Mutati said government is optimistic that it will not default on its loan repayments following measures which have been put in place to reduce the pace of debt accumulation as well as improving its management.

As of December 31 2017, Government’s external debt stood at US$7.9 billion from US$ 6.9 billion recorded by the end of 2016.

Mr. Mutati said Government would not be the first generation to default on its debt bearing in mind the risks that came with the development.

“Since independence, this country has never defaulted and it is not within our DNA to be the generation that creates opportunity for default, we will make sure that our management capability of debt using appropriate tools ensures that there is no default , including looking again at our infrastructure portfolio. We do not want to default.

“Debt is an important source of development, expenditure and poverty reduction. All countries borrow for investment and development. What is important is how and what you borrow and how you employ what you have borrowed bearing in mind the ability to be able to pay,” he said.

He was speaking in Lusaka on Friday evening at a public forum which was discussing the economic performance of the 2017 and the 2018 outlook.

Mr. Mutati also said Government achieved all its targets in 2017 and that they had since started yielding results as could be seen from the economy which had begun to strengthen while becoming more grounded to deal with the twist and turns that lie ahead.

He, however, said climate change and oil prices, among others, remained risks for the local economy.

He has since encouraged citizens to focus more of their energy in contributing to economic development and not spending much time on social media such as twitter saying “There is no time to do that because there are tasks to be done, you cannot manage an economy through twitter.”

And acting secretary to the Treasury, Mukuli Chikuba, said Government had US$1.05 billion outstanding of stock of guarantees.

“If we say our external debt is US$7.9 billion, all we are saying is that is the debt that Zambia has drown and when we net out any repayments that have been done in the year and disbursements that have come in, the net position is US$7.9 billion. We have as at end of 2017 US$5.92 billion that has not been drawn and it will be drown over a period of five years, we US$1.05 billion outstanding of stock of guarantees,” he said.