Debt sustainability strategy missing in budget – JCTR

THE Jesuit Centre for Theological Reflection (JCTR) says raising domestic revenue collections to at least 18.5 percent of gross domestic product (GDP) is ‘too’ modest and should be revised upwards.
Meanwhile, the organisation has observed that the budget speech lacked a debt sustainability strategy following the increase in the country’s external debt currently standing at US$4.7 billion while domestic debt is at K21.9 billion.
JCTR media and information officer Mwiinga Shimilimo said, “The socio-economic policy objective for 2015, which include raising domestic revenue collections to at least 18.5 percent of GDP, is too modest and must be revised upwards in view of the recent information that Zambia’s GDP is 25 percent larger than previous figures had indicated.”
Ms Shimilimo said this in a statement reacting to the 2015 national budget.
She commended Government on the overall outlay of the national budget presentation as it has allocated funds to priority areas.
Ms Shimilimo said the 75 percent financing of the K46.7 billion from domestic revenues is also an impressive decision.
On the debt management, she said there is need for a debt sustainability strategy to be in place to know how Government will reduce its debt.
“The Minister of Finance [Alexander Chikwanda] did not adequately enlighten the nation on how the country will handle soaring debt levels on account of Government’s high appetite for commercial loans to address fiscal deficits,” she said.
Ms Shimilimo said although Government has consistently assured the nation that debt contraction is within the country’s debt sustainability levels, the minister is taking an over-simplified approach over the matter.
She urged Government to adhere to fiscal prudence, policy consistency, focus and broad policy consultations as key operating fundamentals to successfully executing the 2015 budget proposals.

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