Analysts on Thursday said an International Monetary Fund (IMF) aid package was vital in order to reduce Zambia’s debt distress.
The Zambia Institute for Policy Analysis Research (ZIPAR) said without the IMF intervention, the risk of debt distress will grow as the southern African nation was likely to see a continuation of excessive spending and mounting fiscal imbalances between revenue and expenditure.
Caesar Cheelo, the think-tank’s research fellow said in its April report entitled “Financing the Economic Stabilization and Growth Program (Zambia Plus) in the Shadow of the IMF”, that a deal with the international financiers was also vital as it would improve international confidence in Zambia and unlock external investment and donor resources and avoid continuation of fiscal slippages, mounting debts and possible external imbalances.
Zambia has been negotiating with the IMF for a possible aid package estimated at 1.3 billion U.S. dollars but the talks have stalled with the international financiers expressing concerns over the country’s rising debt stock.
Last year, the IMF urged authorities to slow down on contraction of new debts, especially non-concessional loans, to maintain debt sustainability.
Last week, Minister of Finance Margaret Mwanakatwe said the issue of debt management will form part of discussions with the IMF during talks on the sidelines of the IMF/World Bank Spring Meetings.
Analysts have expressed concern over Zambia’s true debt figures, with the government insisting that its official foreign debt currently stands at 8.7 billion dollars.
Trevor Simumba, an international trade consultant said the government should stop being defensive about the country’s growing debt as the truth will soon come out.
“If independent analysts are wrong then give us the correct figures not preliminary figures please. Citizens have every right to require transparent and verified government data on our debts,” he said. Enditem