MINSTER of Finance Felix Mutati says Zambia will not borrow more than the US$1 billion debt ceiling to avoid going into a debt trap between now and December 2017.
On Wednesday, Mr Mutati said Government plans to borrow from local commercial banks to dismantle the K10 billion it owes various suppliers and contractors across sectors.
He said Government will only contract debt that is sustainable to enable it to create liquidity in the economy.
And the donor community has committed US$26 million towards the Public Financial Management Reforms aimed at improving the financial management of public resources as Government aspires to ensure equity in the allocation of the national cake.
Minister of Finance Felix Mutati said the cooperating partners comprising Britain’s Department for International Development, Germany and Finland through the multi donor trust fund administered by the World Bank, which committed US$17 million yesterday, pledged an additional US$9 million.
Mr Mutati said with the Auditor General’s report continuing to highlight serious irregularities in the management of resources by public workers annually, the Public Financial Management Reforms programme remains key in addressing the weaknesses.
“The volumes of misuse, wastage and misappropriation reported are high. Irregularity has been a diet in the public service and we need to remove the fire that cooks the meal as it undermines prudent financial management,” he said.
He said this yesterday at the signing ceremony for the programme and launch of the Public Expenditure and Financial Accountability (PEFA) assessment that will provide the framework for identifying and assessing the strengths and weaknesses in the public financial management system.
Mr Mutati said the attainment of equality and narrowing the poverty gap will be achieved if the country has a well-functioning accounting and financial management system that provides the framework for Government to provide public goods and services.
World Bank country manager Ina Ruthenberg said Zambia will only achieve the growth benchmarks if public financial management is strengthened.
“Our global experiences indicate that an investment of K1 can lead in increased revenue mobilisation up to K10 by implementing good reforms in revenue mobilisation,” Ms Ruthenberg said.
She also said improved budget credibility will go a long way in enhanced service delivery and citizen welfare.