The Institute of International Finance has projected that Zambia’s debt could rise up to as much as 90% of the Gross Domestic Product(GDP).

IFF Associate Economist Gregory Basile said that the Institute expects Zambia’s debt to continue to grow to 90% of GDP, assuming a modest baseline.

Mr Basile however said the trajectory is highly susceptible to shocks.

“A sharp depreciation would have a significant effect, quickly raising the level of debt, before automatic dynamics take effect,” he wrote.

“On the other hand, a significant shock to real growth would not only raise the level of debt (relative to GDP), but also change the debt trajectory, “pushing” the slope of the curve up. But these channels do not operate separately.”

Mr Basile warned that if investor confidence weakens and or copper prices decline, both could experience a significant shock.

“This would balloon the debt as well as financing needs, despite long maturities on foreign debt.”

[Read 2,321 times, 1 reads today]
Loading...

17 COMMENTS

    • ECL cant let even a day go by without mentioning HH.Now I understand this infatuation of HH by PF.
      The kids are hungry….its HH
      ZESCO units have run out….its HH
      Load shedding….its HH
      48 ghost houses….its HH

      15

      0
  1. There is hope under dynamic analysis of those baseline projections especially if Gov and the New Minister IMPLEMENTS THE SALES TAX and changes are made to existing Tax and Fiscal Laws to ensure such a % proportion of GDP is not attained if you look at it from the long-term

    We have seen the New IMF economic forecast July 2019 Yes its pessimistic on Growth and Inflows but countries that will position and find growth in sectors and revenues even in the gloomy economic outlook will emerge stronger and Zambia is one such country with potential in economic structures human resource and commodity resources

    If this transition is managed well in Fiscal plans and structural reforms on…

    2

    14
    • Sales tax is a none issue, especially that we do no have a strongh manufacturing base. The very fact that the country is import dependant with little financial power to allow for pooled procurement, it means many players and directly implying multiple 9percents. The poor will be pushed to the corner which will be difficult to come out from.

      8

      0
    • Oppressive sales tax is not the answer. The people are already beyond breaking point as it is and the government has nothing to show for the debt except for mansions owned by the leaders and cohorts.

      6

      0
  2. iwe spaka leave hh out of this
    if you don’t understand economic modeling sit your a ss down
    that’s the forecast based on Zambia’s current situation. sure it’s a pessimistic one, but judging by the country’s current policies, (debt contracting for consumption) that’s the right approach.
    the borrowed funds ain’t invested in any income generating (long term employment) ventures. they are used for politically motivated projects

    7

    3
  3. and structural reforms on the Sales Tax we will not reach those % Projections

    And Economic analysis and commentary must give an observed accurate and reasonable analysis giving the both sides in reaching the conclusions

    1

    0
  4. Those grim debt projections are believable because the Zambian economy is growing at just 2% . Such a dubious legacy for Edgar Lungu.

    8

    0
  5. Very silly man or false prophet .Every time i read such rubbish in the past i would take them serious and feel like the whole country is on fire and made me sad.At the end of the day is the same old story of warning and warning.just work hard and make 48 houses like your friend than concentrating on future telling why worry about something you have no control or cant change ???

    1

    7
  6. More productive and beneficial than spend it on fictitious beans supply contracts, travel claims, workshops and the ilk like when the country couldn’t build schools, roads, dams and so on yet money was there just being whittled away.

    2

    0
  7. I NEED TO HAVE A COMMENT FROM THE PF MEDIA DIRECTOR SUNDAY CHANDA OVER THIS ARTICLE AS WELL AS THE MINISTER OF FINANCE.CAN THE NATION BE TOLD OF THIS 90% DEBT BY THOSE WHO ATTENDED THAT SILENT MEETING WHICH WAS HELD IN LIVINGSTONE ~ A MEETING WHICH WAS ALSO ATTENDED BY KENYAN PRESIDENT.IS IT TRUE……….OR JUST FABRICATIONS THAT THE DEBT HAS RISEN TO THAT HIGH.

    1

    1
  8. The solution to all the question is we should start producing our own things and curb all imports and ban all foreign companies ….this way the money will remain in the country .
    Instead of coke and Pepsi start drinking lemonade ,fresh juices made in zambia, instead of wearing branded clothes start wearing made in Zambia…so on and so forth.
    We should all be involved in agriculture in a full fledged way….A to Z crops because our strength is land and natural resources which not many countries around have it.
    All the surplus produce should b exported to the rest of the world.
    Our own manpower and people is the power or asset of this nation if utilised and channelled properly.
    Taxes should be abolished because it was started by British when we all were slaves to weaken the…

    2

    1
    • This is good, it’s just a dream. Zambians ‘love’ foreign stuff. Anything foreign is good, including “men”..It will be hard to stop them from going shopping in SA or Dubai for the latest clothes and “Brazilian hair” …

      1

      0
  9. All our nkhongoles/ debts are in dollars and the more the kwacha slides the more we have to pay. If we borrowed $3million in 2014 when the rate of the kwacha to a dollar was K7/$1 and the rate today is K13/$1 its clear that we are paying back twice now. Try to bring down the dollar and things may workout well. But its like the kwacha is not under control against the dollar – a serious run away train. Boma iyanganepo – let the government work on the rate its getting serious and for real very soon we shall surpass our own GDP in debt servicing.
    Disaster!

    4

    0
  10. The fact that these are projections means there is still hope. Zambia has sound economic fundamentals at the moment. we can’t help accepting every negative projection as a fact. We need to address two things, (1) the kariba dam power generation problem by putting in place alternative measures before water goes below operational level to avoid assaulting production and (2) we need to maintain the stability of our currency to avoid disturbing loan repayment strategies if we allow currency fluctuations.

    0

    0

Comments are closed.