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Friday, August 14, 2020

Zambia’s debt continues pilling up as first half growth shrinks

Headlines Zambia’s debt continues pilling up as first half growth shrinks

Bwalya Ngandu
Bwalya Ngandu

Zambia’s external and domestic debt stock has continued rising with the latest official figures showing it now stood at US$10.23 billion as at end of June 2019.

This is against the end-March figures of US$ 10.18 billion.

Domestic debt in terms of securities and bonds as at end June 2019 also rose to K60.3 billion compared to the end-March position of K58.3 billion.

This was revealed by newly appointed Finance Minister Bwalya Ng’andu during his quarterly media briefing.

Dr Ng’andu said the external debt stock as at end June 2019 was US $10.23 billion compared to US $10.18 billion at end March 2019.

He added that the stock of guarantees is currently US $1.3 billion, unchanged from the end March 2019, and end-December 2018 position.

“During the quarter, subscription rates for government securities declined relative to the first quarter of 2019, due to liquidity challenges, perception and exit of foreign participates in the market. Arrears stood at K16.7 billion at as end March 2019, up from K15.6 billion as at December 2018. The increase in arrears is due to increased disbarments on infrastructure development,” Dr Ng’andu said.

And the preliminary data indicates that the economy shrunk in the first quarter to 2.6 percent compared the 2.7 percent recorded in the first quarter of 2018.

“Growth was driven by the wholesale and retail and information and communication sectors. The financial and insurance sector also performed favourably. Positive growth was also recorded in electricity generation and transport. Mining and Agriculture growth was subdued.
He added, “Looking forward to the rest of 2019, risks to growth include electricity load management being carried out by ZESCO that will affect most sectors. Further, the continued lower investment and subdued commodity prices may affect copper production. Climate change challenges continue to weigh down agricultural production and electricity generation.

“On the basis of these risks, we project that growth will be in the 2 to 3 percent range in 2019, and to gradually pick up in 2020 and the medium term.”

On Sales Tax Implementation, Dr Ng’andu said the timing of the introduction of Sales Tax will be addressed in Parliament.

“Having finalized country-wide consultations on the switch from VAT to Sales Tax, we are now addressing issues that have come from the consultation process. These include the cascading effects due to multiple value chains and the need to avoid loss of employment due to possibilities of value chains dying off including the timing of introducing the tax and the need to protect manufacturers. These will be addressed as the process evolves in Parliament.”

On tax collections, Dr Ng’andu tax said over the first half of 2019, total revenues and grants amounted to K32.6 billion, 8.31 percent above the projection of K30.1 billion.

He said domestic revenues at K32.1 billion were above target by 9 percent.

“This was mainly driven by higher nontax revenues collections, mostly from declaration of dividends. On tax revenues, VAT collections were higher than projected by 17 percent, although refunds have increased to an average of K1.4 billion per month from around K800 million in 2018. This has deprived the revenues required for capital and social sector spending,” he said.

Dr Ngandu also admitted that higher fiscal deficits have been driven, by higher than programmed external project financing.

“Thus, Government has taken measures for management of project disbursements, debt cancellation and rescheduling to bring down deficits to sustainable levels. This is in line with the SADC macro convergence regional targets. This will be supported by measures to postpone and cancel some contracted but not disbursed loans, which is in line with the directive by the President from the special Cabinet Meeting of 27th May, 2019. This is an activity which I intend to actively engage my fellow Cabinet Ministers.”

On foreign reserves, Dr Ng’andu said external Gross Reserves as at end June 2019 remained at the same level as at end March 2019 at US $1.41 billion which is 1.6 months of import cover.

“The Government will continue with policy measures to support the build-up of reserves, which among others, will include payment of mineral royalty in US dollars and buying of foreign exchange from the market by the Bank of Zambia. Measures on gold purchases will also continue,” he said.


  1. I like the unblemished appearance of Mr Bwalya Ngandu, just by looking at his face, you can see the GDP growth, I wish others within PF can have such faces as well.not Nkandu’s, Kampyongo’s,Lusambo’s, Sikazwe’s, etc, those faces alone can see the fuel prices go up.

    • What is $10 billion divide by 15million Zambians?
      KK was almost crucified over less than $1billion.
      Shut down that PF government.

    • Dr Ngandu said “During the quarter, subscription rates for government securities declined relative to the first quarter of 2019, due to liquidity challenges, perception and exit of foreign participates in the market”

      From this statement alone I can see that the new minister of finance has began to dance to PF s’ den of thieves ‘s songs of lies and ineptitude. He says governments issued bonds are losing value due to …….., PERCEPTION and EXIT OF FOREIGN PARTICIPANTS when he clearly knows that its the political climate propagated by PF ‘s Chagwa Lungu causing this political risk which in turn breeds negative perception and the rampant theft of public funds which are then externalised by Chagwa and cabal of thieves that is responsible for the economic challenges facing Zambia at…

    • I can see that this new minister is afraid to hold the the spade by the handle and shove off the inherent ineptitude within the PF leadership. He has began to sing praises so he can also cut deals like those of Chitotela and pay protection money to Lungu.

      Only the competent team of UPND can fix the ailing Zambian economy.

      Chagwa ni mfwiti aloza chalo through his stealing.

  2. Here we go new guy in the office comes with some glossy monthly Newsletters and financial forecasts …remember when Aunty Dizzy came in with those fortnightly publications painting a rosey picture when on the ground its a completely different story. I feel for this man Ng’andu as the empty tins like Lazy, Kaizer, Freedom, Chitotela, Luo will make him feel like he is nobody after 3 months especially that he is not a politician.

  3. It will be cardinal and important to Go ahead with implementation of Sales Tax Its the only way some deficits will reduce to projected 6% in the current low growth economic environments taking it to parliament is Good but time may be of en-sense for much needed revenues

    It needs an objective and non sided mind

    Please go ahead and implement the sales tax as failure will be final

    • I take it you dont run a proper business…you think its sensible to introduce a new tax method during a fiscal year. The only thing wrong with VAT is PF is not prudent or savvy enough to manage it. One miniute they say FQM owes them $7 billion then they go quiet just like the cases Kasolo was pushing to court against them!!

    • VAT refunds have doubled after announcing the introduction of sales tax. Businessmen or just crooks?

    • Chapamo Geraboo – Businessmen will be businessmen when they see a weak corrupt system…UK has a VAT system why don’t you ask them for technical assistance they also have issues with fraudsters but guess what when they catch you my friend they will clean you out before they send you away to her majesty’s prison.

  4. This is the same message our former finance used to report, Hon.magaret is more competent in financial banking and more suited for MOF not this physcologist , check his CV not closer to economics and he never made any strides wherever he worked, even he never stayed in one position for a longtime meaning he is not competent.

    • And you think someone can be Deputy BOZ Governor by pretending …have you seen the smart junior officers that work there??

  5. You are no longer at Bank of Zambia where we here such stuff. People are expecting solutions from you. Leave that to Bank of Zambia. Mind you the expectation from you are extremely high.Tell us how you will deal with that debt burden. Since you are a new broom, we expect you to start sweeping clean. It should start with telling the president to cartel his travelling errands. The austerity measures that have been put in place should strictly be adhered to. That staff that you have started to disclose, everyone knows it. People are anticipating of how you will bring down the inflation rate,exchange rate and other economical variables. Not that data you have started talking about. Leave that to banks. Otherwise, you will be written off like your predecessor.

    • No austerity measures hv been put in place. Talking about austerity measures and implementing austerity measures aren’t the ssme thing.

  6. Changing the goal keeper for a team that has spent billions yet continues to lose will not change the results…..

    Lungu himself said he is like a coach and can change players , only his team is nearly being relegated despite spending billions….

  7. While others are cultivating, you are busy moving from door to door asking for food. PF if you where my father i would have denounced you a long time ago. GDP Shrinking by more than 30% while debts increased by the same margin in space of 3 years. awe even a Grade seven can tell that things are not ok.

  8. Don’t listen to ONLINE stone throwers who sleep on the keyboard.

    They are here to sale a product that sales like hot cake where they come from but fails to penetrate the urban market

    I have read the article carefully but not understood everything. Am no an economist.. however its interesting to read economics.

    Ministry of finance is the most important of all ministries

    Thanks a lot sir.

    • @State capture.

      The doc says we have $1.4b in our reserve just enough to cover one month imports.

      Is that a hypothesis??

      Help me understand.

  9. When you have too much anti Tonga crap in your head you really cant understand anything of substance even stuff that you can easily google on your own.Make some effort to first research before you hit the button asking questions!!!!

  10. Global Growth in japan ,which is a signal for economic prospects , has slowed down and is projected to remain so unless concerns and conditions Improves which tells the New Minister almost immediately something on how he needs to do is fiscal plans and mitigate many down side risks He will have little growth for much revenues but will still need to motivate that productivity He should not abandon the sales tax because it will give him the Cash flow space needed for to restructure and create the space for his spends and commitments He should also see the bigger risk in spreads in the high yield market and position his Treasuries to perform for long-term

  11. Bafi.kala imwe mwanya nomba, these debts you like accruing will sink you now. Appointing someone called Bwalya is like “ku beya sipombwe for musebezi wa kumamela simu ya mbonyi, its fooling because the ape will feast on the maize!

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