The African Development Bank Group has approved an $11.1m loan to support Zambia’s efforts to restore fiscal stability.

The funding was approved by the Abidjan-based African Development Fund in a bid to help Zambia improve its management of public resources.

The four-year project, spanning 2019–2022, will aim to strengthen the capacity of staff in institutions responsible for public finance, economic management, development planning and statistics.

Zambia is pursuing reforms to stabilise its economy by reining in a widening public debt fueled by depreciation of its currency, drought, and commodity price shocks – it is a major producer of copper, the price of which fell by more than 18% in 2018.

The fund is part of the African Development Bank Group, whose latest economic outlook indicates that Zambia’s high capital investment, high debt-servicing costs, and large wage bill have contributed to its fiscal deficit, estimated at 7.1% of GDP in 2018.

Despite a fiscal consolidation programme, last year’s deficit still missed its target – 6.1% of GDP – due mainly to high capital spending, rising debt servicing, and growing arrears.

The country’s debt ratio increased from 25% of GDP in 2012 to 61% in 2016, and high public and publicly guaranteed debt led to Zambia being classified as at high risk of debt distress in 2017.

Mining output in Zambia is expected to increase by up to 5% this year, although lower demand from China associated with escalating trade tensions is likely to further dampen copper prices.

The AfDB says the slow pace of fiscal consolidation in Zambia represents a key downside risk to its outlook and improving debt sustainability should remain a key priority.

An active debt management strategy would help to strengthen confidence in the economy and rebuild fiscal space.

The ADF approved the latest loan in an effort to strengthen institutional capacity in fiscal and debt management, development planning, public investment management, monitoring and evaluation, and statistics.

[Read 3,430 times, 7 reads today]
Loading...

34 COMMENTS

  1. Trying to clip public debt by further debt contraction for workshops and God-knows what purposes! Why can’t we honestly learn and apply common sense?

    27

    0
    • Yes more debt IS the answer.
      They have borrowed our country into a position where we become dependent on borrowing.
      This is a treacherous slope. When you start down it, you won’t stop until you hit rock bottom. Unfortunately the ones that will really suffer are the ordinary Zambian on the street who are slowly being turned into beggers.

      11

      0
    • Spending on borrowed money without production. And Zambia’s external debt gets worse.

      6

      0
    • Free borrowing fall.
      Threshold defiled.
      Why not borrow some more since there is no one monitoring.
      Kikikikikikijukija yaba.
      From HIPC to EIPC.
      HIPC – Heavily Indebted Poor Country to
      Extremely Indebted Poor Country.

      1

      0
    • Free fall borrowing.
      Is it free money?
      You can’t spend what you don’t have.

      1

      0
    • Jay Jay these guys don’t care about anyone. They are borrowing to steal. They are busy planing on how to share the loot amid the in fighting and forward looking at consolidating their numbers with deputy Ministers. Mukose!!!

      1

      0
    • Just the other day drunkard minister of finance said PF has postponed the borrowing of some 2.6 billion. What has changed now?

      I think Zambia will only get $6.5 million as $2.5 million will be interest in advance and $2 million will be shared between the Zambian negotiator and the loan approvers in a typical African style. ADB guys are stink rich out of such deals.

      They borrowed for 2021 election campaigns. Unfortunately all that money will end up in Lungu and his crony’s pockets.

      Evidence is awash to suggest that every time PF borrows money it disappears quickly into Lungu and his crony’s pockets via travel and other fake allowances. That’s why Lungu ‘ minions fight to for trips with Lungu.

      Lungu must go.

      0

      0
  2. Do we need to borrow this money when we know that there is nothing wrong with technocrats per se in managing our affairs BUT our political leadership which over rules workers to pursue their corrupt personal agenda!Certainly,the Bank is lending since they will collect back with interest! Borrowing unnecessarily,very unwisely!!

    6

    1
  3. P.F is like a Heroin addict, who believes the way to solve the predicament they are currently in is to take more Heroin, as the pains go away after a hit.
    Unfortunately reality is to curb your heroin addiction, no matter how painful @ the time, you will need to seek other strategies, than going back to your dealer, & buying more Heroin.
    BUT AIKONA BA JONA, NA BA P.F. THEY WILL TAKE THAT LOAN, MOST OF IT WILL BE DIVERTED TO FUND P.F BY ELECTION CAMPAIGNS ANYWAY, THEREFORE NOT SOLVING ANYTHING, & the rest will find itself in Cadres pockets, as payment for brutalising opposition members, as was done in Sesheke, & Roan. KAYA?

    13

    0
  4. The amount borrowed speaks volumes. at the level we are going, i think i’ll soon be able to lend the government if not too risky.

    4

    0
  5. And yet that girl Mwanakatwe who doubles for Treasury and Whore-in-Chief claimed she is not worried about the souring public debt-to-GDP ratio. Any government’s gross borrowing requirement consists of the difference between revenue and expenditure. Now, as long as Lungu’s PF government continued to manage its debt and financing needs in a stupidous manner such as useless bye elections and expensive presidential jet planes the country can ill afford, Zambia’s gross borrowing requirement could within the next couple of years escalate to 100+ percent of GDP. And that is when Zambians will stare the abyss in the ass, you will all puke your tribal bigotry by having elected a certified fool for president.

    1

    0
  6. Yakosa nomba. This does not make sense anymore naine nomba na naka. Bola yabipa.

    Zambia PF bought a Presidential plane for 85 million dollars and the same PF go on to borrow 11 million dollars. Surely there is something very wrong with the Government’s scale of preference. The future generations must tighten their belts pantu cha chi lamo. A country can borrow. Yes but borrow an amount that can be paid back over a period of time fully knowing how the paying back will be financed. I don’t see this.

    Every thing is now turning into a nightmare. Doesn’t the government have Qualified Economic advisors??

    The future generations prepare yourselves

    Oh my God

    0

    0
  7. make sense anymore naine nomba na naka. Bola yabipa.

    Zambia PF bought a Presidential plane for 85 million dollars and the same PF go on to borrow 11 million dollars. Surely there is something very wrong with the Government’s scale of preference. The future generations must tighten their belts pantu cha chi lamo. A country can borrow. Yes but borrow an amount that can be paid back over a period of time fully knowing how the paying back will be financed. I don’t see this.

    Every thing is now turning into a nightmare. Doesn’t the government have Qualified Economic advisors??

    The future generations prepare yourselves

    Oh my God

    3

    0
    • Kaloba all the way n life getting harder by the day but people still vote for the same leopard in the hope that it will lose it’s spots

      0

      0
  8. Yakosa nomba. This does not make sense anymore naine nomba na naka. Bola yabipa. (missing text from my post above)

    0

    0
  9. you buy fire tenders for US$42m not worth the price then u go and borrow US$11.1 million to boost public finance management my country what is the curse u have?

    4

    0
  10. Hooked on the Dope of Debt!
    IMF warned us against contracting more debt but we seem to be unstoppable!
    The next 100 years of Structural Adjustment will be rough for Zambia! We should brace for more pain because we still have Two years and 3 Months of PF!

    3

    0

LEAVE A REPLY

Please enter your comment!
Please enter your name here