ZAMBIA’S external debt as at December 2015 stood at US$6.4 billion, representing 38.7 percent of Gross Domestic Product (GDP) which is below the internationally accepted threshold of 40 percent, Finance Minister Alexander Chikwanda told Parliament yesterday.
He also said when domestic debt was included, the ratio of total public debt to GDP was 52.7 percent which was below the international threshold of 56 percent.
Mr Chikwanda said this when he delivered a ministerial statement on the state of the economy.
“Sir, that said, excesses and euphoria in terms of borrowing will continue to be discouraged. To this end, borrowing will continue to be limited to sectors that underwrite future growth,” he said.
Mr Chikwanda said Government would also continue to undertake periodic debt sustainability analysis (DSA) to establish the sustainability of the country’s debt and the public would continue to be informed on the debt situation in line with the provisions of the amended Constitution.
“Mr. Speaker, in line with the requirement of the Constitution, I will in due course be requesting this august House to re-align the debt ceiling on domestic and external loans as well as contingent liabilities. This measure is aimed at ensuring that we mobilize adequate resources to attain our ambitious growth and poverty reduction objectives,” he said.
He said he would soon present to Parliament a realignment of the fiscal regime for the mining sector which will enable the mining companies to be afloat in boom and bust periods.
Mr Chikwanda also said he would in due course request Parliament to re-align the debt ceiling on domestic and external loans as well as contingent liabilities in order to ensure that Government mobilized adequate resources to attain its ambitious growth and poverty reduction objectives.
He has since urged all members of Parliament to fully support the measures which he would present to the House.
Mr Chikwanda said Government had taken a bold step to ensure continuation of mining activities and limit the disruption such as loss of employment and the potential increase in poverty levels.
He also said debt sustainability remained a key objective for Government.
“I wish to inform this House that despite the sharp depreciation of the Kwacha, Zambia’s debt ratio remain with internationally accepted thresholds,” he said.
And Chikwanda said the high inflation rate was mainly a result of the effects of the sharp depreciation of the Kwacha in the third quarter of 2015 coupled with the high production costs which were induced by power rationing.