Fri, 27 Oct 2017 09:22:25 +0000
By Mailesi Banda
ZAMBIA has not failed to meet the requirements for the $1.6 billion International Monetary Fund (IMF) loan but has been advised to avoid contracting non concessional loans, resident representative Alfredo Baldni has said.
Mr Baldni said public debt has been rising at an unsustainable pace leading to the Government borrowing domestically, a move which he described as a threat to private sector development.
Speaking during the Zambia Institute for Policy Analysis and Research debt management conference, Mr Baldni said the Zambian public debt was increasing and posed a risk of debt distress.
He noted that there was a huge gap between the money financial institutions lent to the Government and the private sector, adding that the former was attractive due to capacity to pay back the latter contributed more to investment.
Mr Baldni said that while Government borrowed for the sustainability of different Government programmes, the private sector does so for economic development.
He revealed that directors from the IMF expressed concern over the pace at which public debt has increased and now placed the country at a high risk of debt distress.
“The Government should slow down on the contraction of new debt especially non concessional loans to strengthen the debt management capacity in the country,” Mr Baldni said.
He also said there was need for fiscal consolidation restraint on non concessional borrowing and strengthened public debt.
Meanwhile, ZIPAR executive director Pamela Kabaso advised Government to prioritise debt management to protect the economy from a surge in borrowing costs.
Dr. Kabaso said there was need for Government to meet policy and reform requirements revealed in the IMF article consultation with Zambia released on 6th October 2017.
