By BUUMBA CHIMBULU
AROUND US$35 billion in bilateral and private debt-service payments will this year become due on the public and publicly guaranteed debt of the International Development Association (IDA) countries such as Zambia, says the World Bank Group.
IDA, which Zambia is part of, is a portion of the World Bank Group that helps the world’s poorest countries.
In 2022 alone, around $35 billion in bilateral and private debt-service payments will become due on the public and publicly guaranteed debt of IDA countries, says World Bank Group president, David Malpass.
Mr Malpass said given that burden, vulnerable countries would find it increasingly difficult to support recovery or direct resources to health, education, social protection, and climate.
He said this in the Group’s Global Economic Prospects released this month.
“Some of the most important steps to contain inequality can come from domestic growth and innovation. The digital revolution offers an opportunity to strengthen social protection systems and health and education services.
“It can enable access to finance and help create new jobs and economic opportunities. E-government initiatives can facilitate access to public services for the poor and encourage entrepreneurs,” Mr Malpass said.
Mr Malpass emphasised that greater access to continuous electricity supply would be a vital first step.
In addition, he said, policy measures to facilitate cross-border trade and investment, especially if combined with reforms in developing countries to improve business climates, human and physical capital could help these countries generate the productivity growth needed to catch up to advanced-economy per capita incomes.
“To enable social spending while investing more in infrastructure, climate adaptation and clean energy will require a careful review and prioritisation of public spending, subsidies, and measures to expand the tax base.
“It will be equally important to strengthen financial systems, and to reprofile debt to spread out repayments and reduce exchange-rate risks,” he stated.
