Gov’t now in K242.7bn domestic debt

By BUUMBA CHIMBULU

GOVERNMENT has confirmed it is facing challenges managing domestic debt, which has ballooned to K242.7 billion, largely due to accumulated arrears such as those related to fuel procurement.
Finance and National Planning Minister Dr Situmbeko Musokotwane said while external debt – standing at US$15.8 billion – remains under control, it is the domestic debt that is proving more problematic.
“The real challenge is domestic debt. It’s consuming more resources than we would like,” Dr Musokotwane said.
“This debt includes arrears from previous years. For instance, we recently addressed fuel arrears that have now forced us to restructure the 2025 national budget to accommodate their payment.”
He explained that from around 2015, and more prominently from 2017, the country turned to heavy domestic borrowing as external financing sources became limited.
“There was a significant increase in borrowing through instruments like treasury bills and many of those are now maturing. Because we didn’t restructure that debt, it’s now putting pressure on the Treasury,” he added.
Despite these concerns, Dr Musokotwane assured the public that the country is not in a debt crisis. “Relax. There is no debt crisis. Everything is under control.”
Meanwhile, the minister disclosed that Zambia is seeking an additional US$145 million by extending its International Monetary Fund (IMF) support programme by another year. The current programme is set to end in October.
“Once the current programme ends, we’ll begin discussions to extend it. Investors are already regaining confidence – money is flowing back into government bonds and bills,” he noted.
He stressed that continuing the IMF programme is vital not only for direct funding but also to maintain access to donor support tied to the IMF’s involvement.
“If we were to end the IMF programme now, we would risk losing about K4 billion in the 2026 budget. This is funding that comes from institutions like the World Bank, African Development Bank, European Union, and other partners who base their support on the existence of an IMF-backed programme,” Dr Musokotwane said.