ZAMBIA’S external debt stock has increased to US$4.7 billion as of last month, representing an increase of 34 per cent from $3.5 billion recorded last year.
Domestic debt also increased to K21.9 billion, reflecting an increase of 5.6 per cent from K19.7 billion registered last year.
Finance Minister Alexander Chikwanda told Parliament in Lusaka today when he presented the 2015 National Budget that the increase in the external debt was mainly on account of the $1 billion issued in April this year as part of programmed financing in the 2014 Budget.
Mr Chikwanda said the total external debt service for the first nine months of this year amounted to $126.2 million, which was less than three per cent of the domestic revenues, while the increase in the local debt was due to programmed financing for the 2014 Budget.
“The net present value of Zambia’s external debt at 23 per cent of GDP remains below the internationally accepted threshold of 40 per cent of GDP. Mr Speaker, I wish to assure this House that the PF Government will exercise fiscal prudence in contracting debt. Borrowing will therefore be restricted to financing only critical capital investments,” he said.
Mr Chikwanda said to avoid burdening future generations with debt, the Government would further strengthen domestic revenue mobilisation so that an increasing proportion of the Budget would be financed from domestic resources.
On domestic borrowings, the minister assured that the Government would limit this to not more than two per cent of the Gross Domestic Product (GDP) to guarantee that fiscal policy did not crowd out the private sector, adding this would support the lowering of interest rates in the domestic market.
You can Downlad the full Budget below
LINK FOR DOWNLOADING National Budget Speech 2015
Mwanawasa was our greatest President todate. Mangande was a great Finance minister. Let us pray and in 2016 vote wisely.
And our “Useful……..” Chindakwanda shouts all over LT that his PF have a manifesto and development plans that are elevating Zambia to better times.
ZRL on the brink of bankrupcy, mealie meal unafordable, fuel unaffortable, constitition selved half way down the line and the only thing growing is the NATIONAL DEBT.
More like elevating Zambia’s debt to the old times if you ask me….
@Mwanawakwitu,that is a debatable matter! Much as we agree that Levy had performed reasonably better than expected considering the way he came to be President and what he achieved in 7 years of leadership,we should also remember that some his achievements were a mere completion or maturity of what his predecessor had initiated. Debt cancellation was a culmination of efforts of successive Finance Ministers (Kasonde,Penza,Nawakwi,Katele) and the patience of Zambian people who adhered to economic adjustment programmes till we reached HIPC completion point!The investment in mining and other sectors also started under FTJ’s leadership. And ofcourse we should not ignore KK’s contribution for the foundation he set for us!Levy had his failures too! Even Sata with his failures has some scores!
He is Chikwanda not Chikanda , proofreader needed at LT . This borrowing was started by MMD.
Opposition MPs look old and tired. Apapene
@Zambia-Niyatu,
Please do not underestimate Mwanawasa’s achievements by trying to link them to Chiluba. The criteria for debt relief as very simple (Good Governance structures and fight against corruption). Chiluba failed miserably on the latter hence his prosecution earned Mwanawasa the international recognition and subsequent debt cancellation. Chiluba achievements are sorely centered around market liberation and wealth creation for Zambians through home ownership.
Mwanawasa was not the greatest President of this country. He comes second to one Kenneth David Buchiziya Kaunda. KK despite his humble education understood that a country can only develop and be respected when it can have its own industrial base. That’s why during his era Zambia was able to assemble vehicles, TV sets, make its own fertilizer, copper wires, suits etc. Inferior in quality they may have been but one needs to start from somewhere look at where India and China are today, what can they not make. Nuclear bombs even bane. Ba shi Panji’s only biggest mistake was that he could not break from the struggle against colonialism mentality which retarded our economic progress at the expense of liberating ungrateful countries in the Region.
To some us this doom and gloom news. But to PF minions its ok as along as the PF is busy constructing roads and buildings for which there will be no money to run and maintain them afterwards.
As a student at the moment, am really worried , how much hard iam supposed to work so that i will be able to come and payback all that this generation is borrowing.
@ it’s a worry,putting declarations or statements in perspective is not underestimating or diluting what Levy did but merely correct the sequence of events. It is not true that debt cancellation came because Levy was prosecuting FTJ but because the program of achieving debt cancellation was adhered. Zambia had to remove food subsidies,implement cash budget &wage freeze,privatise state companies,remove exchange controls and there were graduation stages before getting debt write-offs;Structural Adj Prog(SAP),Enhance Struc.Adj,Facility(ESAF),Rights Accum.Prog(RAP) .. etc and then HIPC completion point. We were one stage from meeting HIPC completion when Levy took over and we missed the benckmarks in his 1st year due to Budget over run! Are telling us Levy brot Lumwana and Kansashi? NO…
Ya surely were still a long way away. $4.6 Billion was the net profit of a telecommunication company here Telstra in Australia and its our national debt. Any one can Google that. our financial year finished in June on the 30th. We need young blood in this country.
Mr Chikwanda said to avoid burdening future generations with debt…….
It is shocking that Chikwanda has not yet realized that he has over burdened the future generation already. Sad indeed that this govt failed to listen when the alarm bells were sounded at the point of borrowing before plans were drawn on how to use the borrowed resources. Now we have Zambia Railway which thinks of borrowing in order to buy fuel. PF you need external help if you are to assist this country economically.
Picture number one,,,, Lusaka times my anuty Bo Inonge Wina does look anything like Bellyman munkombwe,,,
Debt..nkongole 4.7dollars US dollars shuwa???,,, is it because of presidential medical bills??,,, bursaries no money, salaries no money,, everything no money,, but the debt keeps growing
Ndombo at least you drive yo third hand car on good roads. U must be grateful
This is ridiculous to be accruing such huge debts when the country has no capacity to generate sustainable repayment amounts… Zambians should learn to choose leaders who won’t only bring income raising initiatives but also avoid such huge debts that will hurt future generations to come…. Vote wisely in 2016.
Don’t know whether to laugh with joy or cry with confusion. Sounds we are not too badly off, but Economic management through Debt is clearly still a feature.
1. Picture in 1 does not show Inonga Wina unless she has transformed!
2. Sounds like good news that we are below the 40% borrowing recommended being only at 23%. However, there is a plan to continue borrowing although, restricted, for financing only critical capital investments. I think we should avoid debt centred financing to its barest level.
Downloading budget right now…….what shocks in there??
This Govt ni kafwafwa chabbe……do these guys ve brains I wonder. If u want to chop part of the moneys you get as loans iyi yeve yachila more…..!!!
How do u acrue such debt in a SHORT PERIOD nu bantu ba Leza…!!
Useless article! Why rush to publish things without highlighting important aspects of the budget? You even put wrong captions on pictures. Pure laziness ba LT or you want to go and pint being a Friday?
That’s a lot of debt for a third world country. The question though is what has the money been spent on? After taking a look at one of the galleries on here, I came across trucks in disarray at the Kasumbalesa border awaiting clearance. It was commotion of the highest order. Why not use some of the money to build a tolling station for easier clearance? If you want to develop a nation, you have to improve the rate at which trade can be done. While you’re at it, improve the health care system. There are so many stories of misdiagnosis at Zambian hospitals. Instead, the money goes to ministers, and into short- sighted projects that do not improve the quality of life of the average citizen. If ZESCO and the Water company constantly have to cut supply, then we have a problem.
The GDP growth rate of <7% does not support this enormously high rate [34%] at which we are contracting Debt. This disparity means in about 2 years we will reach the 40% of GDP threshold, and our credit rating will plummet; approaching junk. Borrowing will become increasingly costly due to low credit ratings.
Before we realize it history will have repeated itself; HIPC, we start going round the globe with begging bowls and debt relief campaigns.
Zambia!! we cry our beloved country; Backwards ever forward never!
Didi the minister talked about PAYE?.
There we go HIPC again with such a huge debt in just 3years of being in office-What unpresedented development! By the way fellow Zambians what is happening with funding in government institutions is very worrying-Its not hospitals & clinics even in colleges & high schools have not been funded for some time now.These days if you have an emergency case from a clinic-referal case- one is told to provide fuel. Essential Drugs are not there in some health institutions.Patients are given prescriptions to go & buy from drug stores!It is really happening in PF now. We therefore strongly argue our primitive MPs to seriously visit their constituences and see for themselves how their electorates are suffering!This is very sad development countrymen & women.
I find the comments on this subject quite shallow. There are questions by some contributors as to what the borrowed funds have been used for. Government has in the past given this information. The debate should be whether that has been the best we could have done with those funds! Zambians let us not exhibit intellectual laziness! And the assumption that a different political party will wipe away all the current short comings is a pipedream if we the voters do not or can not clearly state what is wrong in the currrent dispensation. You can’t fix a problem if you can’t define the problem. Common, we are 50 years old!
@Champion. Spot on. Even when MOF now gives us regular updates of expenditure we still believe that we should have a massive reserve whilst children are learning under trees and health services, schools, roads etc are none existent in many rural areas. Yes we can sort out these issues by harnessing our own resources, but until we sort out the mess we are in we have to borrow. We just can’t say development should wait until we introduce windfall tax on the mines…
The other problem is politics has now become a national pastime were all sorts can comment without engaging their brains
Here is a quick one for you. A poor man with no means decides to improve his condition. Is he better off looking at what he has and use that in a more effective way to improve chance of improved income. OR is he better off going to a bank and getting a high interest loan he can’t repay with his current income? Answer: the first option is sensible. The second creates a mutually exclusive situation for the poor man. He loses his meagre income AND has a new problem. @checkov it is you who is not using your head. We as a country already experienced effects of borrowing beyond our capacity to pay back. We are not generating Revenue, but using debt to cancel out debt. Wake up!
This country will only develop when the mindset of the people is changed to realise that life is about survival of the fittest. The biggest problem that we have in this country is too much ichipale, that’s why we we don’t see motorbikes and bicycles as a mode of transport. Go to West Africa and Asia and see how people really don’t care what other people think about them. We shall continue borrowing heavily and failing to pay when God has given us one of te richest countries on earth in terms of resources. You go to Mpulungu and people will tell you that they don’t have drinking water in their houses when the lake is just a few metres from their homes! What kind of people are we? Don’t blame old man Chikwanda, change your mindset and make Zambia the Singapore of Africa!
This is scary. Zambia just cannot afford this out of control borrowing. In a one commodity economy, it’s madness and irresponsible. If the price of copper were suddenly depressed, unable to service this debt, Zambia would collapse instantly and it’s citizens would join the throngs of Somalians and Congolese in the diaspora as permanent refugees. I can predict with near perfect accuracy Zambia will never be able to settle this escalating debt. We are headed at dizzying speed back to reckless borrowing of KK era. Man, are we cursed or just plain stup!d?
JUST PLAIN STUPID!
Our children are being sold into slavery to pay Satas medical costs.
And we sit and do nothing!
industrialization is the only solution.theres is no way we can ever develop as a country if we can’t manufacture even simple merchandise like Razer blades.we need to add value to the many natural resources we are blessed with.
What do u expect from a docile and pumpkin govt. Chikwands has been the worst performing finance minister. Anyway he is there to serve the intrrests of his nephew and the north. Pathetic! How can a finance minister allow such high petsonal emoluments and borrowing in an economy like ours? This is a dull minister, he is not even inspiring when he speaks. What a loss!
Station: AYENDE CHABE.
Good evening
I have said it before and will say it again: the job of Finance Minister is arguably the hardest one can ever get anywhere in the world.
While it is disheartening to see a country as richly blessed with natural resources as Zambia relying so much on external debt, let us also bear in mind that there is no other tool we have at the moment to ensure that our economy continues to grow.
It is on this ground that I find domestic revenue mobilisation to be a good thing because it shows that we have confidence to make it on our own. Since independence, we have been forced to fight against a system of despicable economic barriers and global market strategies designed to keep our nations poor and transfer African wealth to the western region.
This makes sad reading indeed more so the photos of those relics and dinosaurs is likened to applying salt to injury…This reckless Fossil Chikwanda is taking us back to the $7billion external debt line come 2016. Mwanawasa and Banda’s government hard work of prudent management has destroyed.
Both Chikwanda and his sickly nephew in State House are big liability to our country!!
The debts appear reasonable now. But wait until 2021 when the capita elements of the eurobonds have to be repaid!
The debt actually stands at USD8.4 Billion… convert 21.7 Billion domestic debt…which effectively is owed to foreign owned local banks.now factor interest at Libor plus 5% as a minimum that shoots close to $10.Billion.additionally 2015 budget will contract a further 0.6 Billion in debt.You have got to love the gullibility of supporters of the PF agenda.Country is ruined!
This level of analysis is too high for PF supporters. They will not understand this at all.
Bemba stup1dity. No matter how poor this fossil performs it will always be praised by its kind.
And some people have the “balls” to say these guys are working?????? We are now heading back into being one of the HIPC…… shaaaaa!!!!!!
To chikwanda borrowing is the answer, but reality will prove him wrong, history repeats it’self , as we been down that road before, is Chikwanda even thinking of ways to generate these funds without borrowing, if he did he would be pursuing corporations cheating us on tax
@ZAMBIA NIYATU: You may not like President Mwanawasa but try to give credit where it is due. By all standards he left the country better than he had found it against all odds. Why is it that those who came after him, in spite of the foundation laid down, have not managed to transform the country as he had done? If we continue to live in self denial and fish for reasons to discredit his achievements instead of learning from him we will continue to wallow in poverty. The overun was a result of outstanding terminal benefits due the miners in Luanshya that needed to be paid to have the mine sold and reopened. It was a strategic move to resolve an outstanding problem. The issue was adequately and satisfactorily explained. Thanks to that move Luanshya is economically alive today.