EXTERNAL DEBT SWELLS TO $10.1BN

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By FRANK MUKUPA

ZAMBIA’S external debt stock has this year increased to US$10.178 billion from US$10.05 billion, 38 percent of Gross Domestic Product (GDP) as at end 2018.

Finance Minister, Margret Mwanakatwe, said the stock of Government securities marginally declined due to the pay out on some maturities.

“The domestic debt stock at end March 2019 was K58.21 billion down from K58.26 billion recorded at end 2018, representing 21 percent of GDP. Guarantees amounted to US $1.3 billion, representing 5 percent of GDP,” she said.

Ms Mwanakatwe said as at the end of 2008, domestic arrears amounted to K15.6 billion, or 6 percent of GDP.

She said public sector debt, defined as external debt, domestic debt, guarantees and arrears were therefore around 70 percent of GDP as at end 2018.

This was calculated on the basis of the latest GDP figures released by the Central Statistical Office.

“Let me say something about Government intentions with regard to clearance of domestic arrears.

“In view of the magnitude of the amount, the arrears can only be dismantled over the medium term. Depending on the amounts involved, some of the arrears will be quickly paid off, with a focus on local suppliers so as to reduce high non-performing loans, improve liquidity for our suppliers and thereby induce economic activity,” the minister said.

Ms Mwanakatwe said the reserves position as at end February 2019 stood at US$1.43 billion (1.6 months of import cover) from US $1.56million (1.8 months of import cover) at end December 2018.

Ms Mwanakatwe said this was despite payment of external debt service amounting to US $440 million over the period.

On the fiscal side, she said, over the first quarter of 2019, domestic revenues at K14.99 billion were above target by 4.4 percent.

“This was mainly driven by higher non-tax revenues collections, mostly from declaration of dividends. This was supported by continued enhancement of Tax compliance and administration as well as implementation of fiscal reforms,” the Minister said.

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