GOVERNMENT’S resolve to return the country to debt sustainability and initiate projects to grow the economy to three percent this year is the way to go.
The determination to get the country out of the debt is of utmost importance to steer Zambia to economic prosperity.
Zambia’s external debt was at US$11.2 billion at end-December 2019 from US$10.23 billion in June last year, while the stock of domestic arrears, excluding value added tax, amounted to K26.2 billion at end-September 2019 from K20.2 billion at the end of June.
Zambia has found herself highly indebted because Government has been in an absolutely necessary hurry to develop the country.
There was urgent need to upgrade public infrastructure such as roads, education facilities, health facilities, water reservoirs, houses and electricity power stations.
Who would intelligently argue against these needs? They have to be built to not only improve the collective standards of living but to also set a firm foundation for further development.
In the road sector there are projects such as the Link Zambia 8000, the Lusaka decongestion project and the C-400 designed to transform Copperbelt roads.
In the education sector, primary and secondary schools have been built and more are under construction. There are also colleges and universities that have been constructed and others taking shape.
The health sector has had, or is having, a considerable share of the development funds with new facilities being build and others being upgraded.
The Kariba Dam rehabilitation programme is one that Zambia cannot afford to delay in the energy sector which also has the 750MW Kafue Gorge Lower hydro-electric project under construction.
The housing sector has seen a significant, probably unprecedented, boost in construction of houses for public service workers such as police officers and military personnel.
Clearly, this is money well spent. Contracting the debt was necessary for that needed boost in the economy.
These achievements should now help provide the apt environment for further investment by both local and international investors.
This is important because Zambia now has to generate finances in sufficient quantities to service the debt.
Paying debts could have an adverse effect on resources available for providing or improving public services, which can help economic development.
Excessive foreign debt can also hinder foreign and private investment as investors fear that the debt is becoming unsustainable.
Faced with this scenario, Government has no choice but to take strict measures to reduce local and external debt so that it is sustainable.
Therefore, Minister of Finance Bwalya Ng’andu should be commended for the update on the country’s economic status, especially assuring Zambians and the international community about Government’s commitment to returning the country to debt sustainability, including projecting to grow the economy to three percent this year.
Gatherings such as yesterday’s, where stakeholders and economic players were in attendance, are helpful as they give confidence to market sentiment.
The projected growth is attainable if the country gets a bumper harvest as it would also weigh down food inflation risks.
Stability in the energy sector, if sustained, will help to improve production levels in the various sectors despite some underlying risks from debt service costs which will pose a challenge on the availability of liquidity.