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‘Zambia’s debt sustainable over 20 years’

NANCY MWAPE, Livingstone
GOVERNMENT says Zambia’s public debt distress is low and sustainable over the next 20 years.
Minister of Finance Alexander Chikwanda said Government is fully aware of the adverse effects that imprudent borrowing can have on the economy.
“Excessive government borrowing reduces financial resources available to the private sector for investment. Government has taken the issue of public debt sustainability very seriously,” he said.
Mr Chikwanda said this in Livingstone yesterday during the International Organisation of Supreme Audit Institutions meeting in a speech read by Southern Province Minister Nathaniel Mubukwanu.
He said Government will continue to undertake periodic debt sustainability analyses to assess the country’s capacity to carry the debt burden.
“Government undertook a debt sustainability analysis in collaboration with the macroeconomic and financial institute of Eastern and Southern Africa in June last year.
The overall debt sustainability analysis indicated that at the current macroeconomic performance, Zambia’s public debt is low and sustainable over the next 20 years,” he said.
Mr Chikwanda said annually, the Ministry of Finance stands ready to have all the systems and procedures pertaining to public debt scrutinised by the office of the Auditor-General to improve on effectiveness and efficiency of public debt management.
Zambia’s external debt is about US$4.8 billion.
Speaking at the same event, Auditor-General Anna Chifungula said with several countries going to the international markets to issue sovereign bonds, the mixture and management of debt is now more complex.
Mrs Chifungula said the Supreme Audit Institutions (SAI) is equipped with the requisite knowledge and tools to audit public debt and give appropriate recommendations to Government.
“The increase in public borrowing, coupled with a decline in commodity prices, presents Government with a great challenge of meeting debt repayment obligations,” she said.
And Corporate Services deputy Auditor-General Davison Mendamenda said debt management is a central element to public finance.
Mr Mendamenda said the objective of public debt management is to ensure a country’s financial health.

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