Debt stands at $12.9 billion
By OLIVER SAMBOKO
THE UPND government says the national external debt stands at $12.9 billion.
Giving an update on the state of the economy in Parliament yesterday, Minister of Finance and National Planning Situmbeko Musokotwane disclosed that the country’s external debt stands at US$12.9 billion plus $1.57 billion owed by parastatals.
He also said there is also a substantial domestic debt including arrears to suppliers that the government must deal with.
Mr Musokotwane said the total debt as at the end of June 2021, stands at US$14.48 billion.
Mr Musokotwane said the huge payments of external debt drained money out of the economy, leading to closure of many businesses due to absence of demand.
He accused the PF government of the excessive borrowing undertaken during the last ten years they were in power.
He said the ballooning of external debt from less than $2 billion in 2011 to its current levels of about US$14.5 billion reflects the worst economic blunders during the last ten years and it has significantly contributed to the suffering among the citizens.
Mr Musokotwane said the economy is faced with a number of challenges because fiscal deficits have been persistently high; debt is unsustainable, high inflation rate and interest rates.
“The combination of these challenges has brought about suffering among the people, hence the decision they took to change government,” he said.
Mr Musokotwane observed that over a decade up to 2021, the average growth in the national economy has been significantly lower and for this reason that on average, most citizens are poorer than they were ten years ago.
He also said in 2020, the economy contracted by 2.8 percent, meaning the production of goods and services became smaller that the levels attained in 2019.
Mr Musokotwane said the contraction was because of negative growth in the manufacturing, wholesale and retail trade, construction and tourism sectors largely due to supply chain disruptions and a fall in demand.
He said the major factors for the contraction were the Covid-19 pandemic and the blowing up of the debt crisis.
Mr Musokotwane said Government will deal with the problem of the excessive national debt without which it will be impossible to normalise the economy, let alone to bring about fundamental economic transformation for job and wealth creation.
He said he would this week again provide a comprehensive statement on the national debt and the measures being taken to deal with it.
He also disclosed that as at end-August 2021, inflation was recorded at 24.4 percent which is too high and way above the 6-8 percent target band.
The overriding economic policy objective for 2022 and the medium term, will be to transform our economy, expand it and create employment opportunities.
He urged the citizens to focus on growth by expanding output in agriculture, manufacturing, tourism and mines must produce more since copper prices are forecast to remain very high in the next 15 years.
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