Former Finance Minister Alexander Chikwanda has supported the statement by the International Monetary Fund over Zambia’s sky rocketing debt.
The IMF this week stated that Zambia’s rising external debt put the country at high risk of debt distress.
Mr. Chikwanda who also Chairman of the PF Finance Committee told a PF Interactive Forum in Lusaka today that Zambia needs prudence in its debt contraction.
He also admitted that Zambia needs to slow down on borrowing.
“The IMF has expressed worries about Zambia’s debt profile, those concerns are not far-fetched but anyway, somehow our debt profile is high and going in future, going forward we should be a bit more prudent especially those loans which are not for projects which are single sourced, where there is no tender and so on and so we have to be careful and I think government is doing just that,” Mr. Chikwanda said.
The Former Finance Minister however noted that government had never defaulted on repaying debt saying there was a possibility that Zambia could refinance its Eurobonds when they fall due.
“But you know, even in government there are some skills which some citizens may not be aware so the guys in the treasury, they have been very good at managing the debt, there’s not a single day we have faulted on debt repayment which will mean that we can use that track record going forward for instance when the next bond is due, and I think officials from the Ministry of Finance have already made reference to that, it can be rolled over because the people who have invested in these bonds are making a lot of money,” Mr Chikwanka said.
“But going forward, we must really be a bit more reticent, a bit more prudent and the consolation is that okay, all the money has been borrowed to take the country forward. If there was no borrowing, the country would have stood still and Zambia needs to grow at higher rates, not five per cent, we need growth rates in double digits and some of the borrowing will facilitate that,” he said.
Mr Chikwanda also pointed out the need to grow the Zambian economy by higher margins.