Too-Little, Too Late Syndrome: Zambia’s Sovereign Debt Management Strategy


In May of 2015, the Jesuit Centre for Theological Reflection (JCTR) warned the government of the Republic of Zambia, through an article, entitled “The Eurobond Reality Check” to consider with utmost urgency the setting up of a Sinking Fund in order to thwart a fiscal crisis on account of accumulated foreign debt. The government was further advised, to among other proposals, enhance domestic resource mobilization by modernizing, by way of informatics, payments of taxes, fees and fines. The JCTR advised governments that if no immediate and short to medium term strategies were implemented Zambia risks facing a chaotic economic and financial situation on account of government’s high appetite to borrow financial resources from international capital markets.

As JCTR we acknowledge government in coming to terms with a situation of their own making, which situation was hitherto being denied by the same government. In fact Just last April, Minister of Finance’s full report on the Status of Zambia’s Economy in the First Quarter indicated that Zambia’s external debt was at US$8.7 billion. However, we are shocked to be further informed in just under 3 months, in a ministerial statement aimed at informing the nation on government’s efforts “Addressing Fiscal and Debt Challenges for Sustained Macroeconomic stability and Growth” by the minister of finance that the total external debt is now at US$9.3 billion. Clearly, there is something amiss with debt contraction, recording, accounting and redemption. Sovereign debt management in Zambia has not been accountable and transparent. The policy discordance we are witnessing with regard to general economic and financial management in Zambia stem from resistance to accountability and transparency with regard to public resource management.

It is quite apparent now, why the IMF objected to Zambia’s bailout application. Our books are not in order and we have no capacity whatsoever to contract any additional debt given our current over-the-head debt levels. The austerity measures announced by the government are confirmation that CSOs, Think Tanks, the IMF, amongst, others were in order to advise government to reduce its high appetite to contract debt. Among the measures announced by government to regain fiscal robustness and sovereignty include postponement of pipeline debt as well as cancellation of some of the current contracted debt. Further, the Ministry of Finance has been instructed to ensure strict adherence to the programmed domestic financing in the 2018 budget. In addition we have been informed that the Industrial Development Corporation (IDC) will alongside the Ministry of Finance implement these measures by reviewing the performance of state owned companies to restructure their overall portfolio. It is quite apparent that these measures have been undertaken to avert a looming fiscal crisis. Government has become alive to the reality that the current path of unthrift spending is leading the nation headlong into a fiscal trough whose consequences are too ghastly to contemplate. Of primary concern is the fact that the ratio of external debt to revenue is projected to breach the sustainable estimated threshold of 20 percent by the time US$750 million Eurobond is due in 2022. The long and short of what JCTR is saying is that as a nation we cannot borrow our way out of our current development disparities. It has been reported that, the recent debt sustainability analysis conducted by the IMF and the World Bank indicate that Zambia is at high risk of external debt distress, emanating from the Eurobonds maturing between 2022 and 2027. With the ever widening ratio between debt to GDP; Debt to revenues ratio; and add to this a current account that has recorded negative growth since 2015, the government has no choice but to institute remedial measures.

Going forward, as JCTR, on account of a tight fiscus that has ensued, we recommend to government, as they go about implementing the austerity measures to ensure that social sector funding and spending is unimpeded. In this regard funding to health, education, water and sanitation is maintained at a steady flow. We further advise government that the announced blanket policy of funding to projects that are at 80% completion point be reviewed. Instead we advocate for a project re-evaluation after which viable projects might be identified and funding sustained or capped depending on the outcomes of the re-evaluation. JCTR further demands that the Loan and Guarantees Act be amended with mediate effect to bring it in line with the new amended Constitution which demands that all loan contraction be approved by Parliament. The English adage does say that a stitch in time saves nine. In this regard the government must avoid, the “too little, too late syndrome”. The public debt situation we are in, clearly attests that in the conduct of public affairs, “to be forewarned is to be forearmed.” The looming fiscal crisis, on account of accumulated public debt, attend interest payments and the impending maturation of the Eurobonds, is principally on account of ineptitude and a laissez-faire approach to fiduciary matters.


  1. The autopilot function failed a long time ago and the pilot admitted to not knowing how to fly the plane.

    • In last 5 year after being living away from home Zambia for 25 years, was getting ready to come back and do some real investment to even hire at least 10 to 15 people business wise. But guess what, Our beautiful country has completely gone to the DOGS. Why did the lord took Michael Chilufya Sata, that was my only hope. THE REALITY OF ZAMBIAN DEBT IS VERY VERY VERY BAAAAAAAAAAAAAAAAAD.

    • The best solution is for PF Regime to produce a DUNUNA REVERSE DVD and sell it @ $100 each to the 700,000 PF00Ls that voted for kawalala Number-1, Lungu, all the debt will be paid.

      It’s unfair that people who didn’t vote for Lungu should be made to pay for PF theft & incompetence. After all most funds have been channeled on projects in provinces with highest populations of PF00Ls.

    • You can lie your way or rig your way to election victory but you cannot lie your way or rig your way to economic management success. In politics, it’s often the case that the skills you need to win an election are irrelevant in effective policy implementation. Why should “massive development” lead to economic trouble? Sadly we Zambians cannot even hold a sensible dialogue on issues that affect us.

  2. With some individual brilliance and a great team, it is possible to salvage a bad situation. But without concerted effort, team cohesion and individual flair, the situation can only get worse. Not even Lionel Messi can salvage the situation, our trouble is we dont have Messi and neither do we have a great team.

    Strategic lessons for Zambia from the World Cup 2018 tournament.

  3. And the Secretary to Treasury Fredson Yamba was one of the architects and defenders of bonds and debt contraction together with Uncle honourable AB Chikwanda and Miles Sampa. Freddie is still in his position and singing a different tune! In decent societies Freddie would be first to resign, not so?
    Ok, granted, they were all under pressure from Mr Sata, a popular but economically clueless leader. Still, honest people in a civilised society would have resigned if they believed Sata was doing the wrong things which he was. Look at UK, a minister has resigned because he does not agree with expansion of Heathrow airport. Ok, admitted there is no direct comparison, the British minister can survive without his political job, not so with our officials and ministers whose everything from mealie…

  4. …..mealie meal to side kicks hinges on toeing the party or president’s line, no matter how or sill.y that may be. You see it even in upnd and h.h.
    The woes of my country, God help us for we can’t help ourselves!!!

  5. We were telling you so….the PF rats were sontaring and saying we are bitter….leave some roads out and look at manufacturing for import substitutions and exports we said ……no, we need roads and investments will come flooding in we were told , where ?

    The PF rats don’t understand that mother zambia can only give so much by way of natural resources …..they think the natural resources of mother zambia are inexhustable and they just have to call on foringners to come and dig and money flows…..

    Lungu and the PF better pray the trump China spat does not drop the world economy and we continue with bumper harvests….

    • Eventually even amayi Wina was forced to mumble “Sonta.. ” much to her own chagrin I believe!!! kikikikiki

      Yes they were told and their response was you are just bitter. Now there will be hell to pay for all.

  6. The 1diots were advised long before we reached where we are, and they refused saying people are talking out of bitterness. See now where you have brought us you morons. Is it because you know you will be long DEAD when all these debts will be due in about a year and half. It is even more shocking to hear some people saying Lungu and his tandem of thieves are doing very well for this country- People like BR mumba! The roads you were singing loud noise about are getting damaged just after construction at a heavy cost and there no money for repairs. Now tell us what you will do about that. move around the country and see how these roads built at great have been damaged. It was a very wrong move to have put Sata at the helm of this country in the first place. The man thought money grew on…

  7. PF and their rats are the dullest theives ever…..their leader is totally clueless about economics……lungu attended a summit in the fareast some time back and the priminister of Singapore pointedly advised lungu to have targeted infrastructure investments , investments that will start contributing to the GDP and provide proper employment like investing in factories.

    In our opinion half of those roads were not essential and factories and assembly plants in their place would have made more sense.
    I am not an economist but I can tell things are now bitting. Just look at the prices of property falling in Zambia.

  8. No need to sensationalize. Everything is fine. Please GRZ borrow more. We need to develop this thing. We took long to do it. We need international airports in all provinces and dual carriageways linking all provincial headquarters. He will never be president. I mean the chronic loser and baby Childish.

  9. @Sharon! How far did you go as far as education is concerned. Please expose your dullness somewhere else.

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