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Zambia Debt Profile 2018: A Crisis in the Loom

Zambia Debt in 2017 was standing at US$13.5 billion representing 52.5% of the GDP, 70% external debt (US$9.5 billion) and 30% domestic debt (US$ 4 billion). The growing debt burden in Zambia implies straining of the domestic resources and it’s a barrier to attainment of macroeconomic objectives. The government should direct resources from debt to capital projects that have ability to payback and also towards productive sectors of the economy, contrary to funding recurrent
expenditure. The government should strengthen the soundness of its fiscal position through the promotion of foreign direct investment policies and improve capacity utilization across key sectors of the economy. There has been a significant rise in domestic debt, constituting a large share of the total public debt. Hence, the government should formulate and implement prudent domestic debt
management strategies to mitigate the effects of rising debt on the economy.