Govt new borrowing embraces 2022 debt maturing – Expert

By BUUMBA CHIMBULU
GOVERNMENT’S new borrowing for next year amounting to about US$4.2 billion (K72.3 billion) includes debt maturing in the fiscal year 2022, stakeholders should therefore ensure they study the numbers and avoid misleading the public.
This is according to an Economic Statistician and Fiscal Analyst, Shebo Nalishebo, who explained that the actual new borrowing could be below US$500 million and borrowed on concessional terms.
Mr Nalishebo said this in his write-up on “The truth about new borrowing to finance the 2022 budget.”
“There has been a narrative on social media that the UPND government intends to acquire US$4.2 billion in new borrowing in 2022, but after checking the numbers, nothing could be further from the truth.
“As far as I know, the US$4.2 billion (or K72.3 billion) is a gross financing estimate. In other words, it not only includes new borrowing requirements but also includes debt maturing in the fiscal year 2022 amounting to K41 billion. So, the biggest chunk of ‘gross financing’ is actually maturities,” he said.
Mr Nalishebo explained that the plan was to restructure those debt maturities, hence going to the International Monetary Fund (IMF) for an extended credit facility.
He emphasised that it was also for this reason that Government was getting creditors to sign up for the debt treatment under the Common Framework, used to address a wide range of sovereign debt challenges.
“Once you net out the maturities, the “new borrowing” is equivalent to the planned deficit of 6.7 percent of Gross Domestic Product, which is about K31 billion. Government intends to use part of the proceeds from the US$1.3 billion Special Drawing Rights to finance some of the expenditures.
“That is money already in our coffers. So, if you do the maths, the actual new borrowing could be below US$500 million and borrowed on concessional terms,” Mr Nalishebo said.