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‘Zambia will not fall into debt trap’

YAMBA

KALONDE NYATI, Lusaka
ZAMBIA’S debt remains within sustainable levels and there is no cause for panic that the country will plunge into a crisis, Secretary to the Treasury Fredson Yamba has said.
In an interview recently, Mr Yamba said that the country’s debt of about US$6.4 billion is within sustainable levels, and Government is up to date with interest payments when they fall due.
This follows African Development Bank (AfDB) president Akinwumi Adesina’s advise to economies in the continent to put in place urgent measures to ensure macro-economic stability, fiscal consolidation, broadening of the tax base, and deepening of the domestic capital markets to avoid getting into a debt crisis.
Between 2006 and 2014, African nations, including Zambia, issued a total of US$26 billion in Eurobonds.
In  2015  alone,  a  total of US$12  billion of Eurobonds  were  issued, and with the rising  interest  rates,  African  countries  now  face  a  challenge  of high  cost  of financing  the  foreign  currency-denominated debt.
But, Mr Yamba assured the country that, “All the debt we have borrowed is according to our ability to pay back .We are not worried. As treasury, we will pay the debt when it falls due.”
He said it is important for the country to broaden the tax base to grow the economy.
“What is important is to ensure that other players in the economy, especially the real sectors, participate to collect more money from taxes to grow our economy,” he said.
Zambia is currently servicing three Eurobonds: US$700 million, US$1 billion and US$1.25 billion.

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