Zambia’s stock of external debt has increased to US$11.2 billion as at the end of December 2019 from the stock of US$10.23 billion recorded at the end of July 2019.Finance Minister Dr. Bwalya Ng’andu has disclosed that this was on account of new disbursements on existing loans, mostly earmarked for infrastructure development.
Speaking when he addressed that nation on the state of country’s economy in Lusaka on February 12, 2020, attended by the Zambian Business Times – ZBT, the minister further disclosed that the stock of government securities at end of 2019 was K80.2 billion from K60.3 billion at end of June 2019 attributing the increase to the issuance of government securities to finance the budget deficit for 2019.
He added that the stock of Domestic arrears excluding VAT, amounted to K26.2 billion at end of September 2019 from K20.2 billion at end of June 2019. The minister said government had through the Cabinet Memorandum considered to undertake measures which will address debt servicing among which include a moratorium of contraction of external projects loans, cancellation of selected external project loans, and re-scoping of selected externally financed projects in order to reduce the projects and ultimately reduce the undisbursed loan balance.
Dr. Ng’andu however did not indicated as to when such measures will be implemented stating that the ministry may not give a timeline as when the aforementioned measures will be applied but that the process will begin soon.
He added that government is also working towards unlocking liquidity to the private sector and will reduce the stock of arrears to domestic suppliers of goods and services. “Between December 2019 and January 2020, the ministry released a total of K590 million to the National Road Fund Agency – NRFA and paid out K452 million representing 77 percent of the amount owed to local road contractors and consultants. Almost all the contractors undertaking routine maintenance works were paid in full,” he said.
Dr. N’gandu said in order to avoid further accumulation of arrears, Government has as part of its austerity measures enhanced its control systems adding that all erring controlling officers will be held to account in line with the public finance management act. Government has also pledged to return the country to debt sustainability and get the economy on the path to recovery.
