The legal framework guiding debt management levels in Zambia needs to be revised as it has gaps and weaknesses, the Consumer Unity and Trust Society (CUTS), a consumer body, said on Wednesday.
CUTS Lusaka said despite the increasing debt levels, there was a lack of transparency, accountability and participation in the management of debt which needs to be addressed.
“Clear debt management objectives to give a general policy direction are missing in the pieces of legislation and there is no guidance on the procedures of debt management including when and for what debt should be obtained,” Kangwa Muyunda, CUTS Lusaka’s programs officer said.
She noted that the law should require that the government undertake prudent debt management given that debt default could lead to severe macroeconomic consequences.
She expressed concern that despite the government indicating that it would conduct a debt sustainability analysis exercise to measure the country’s debt service capacity in 2018, nothing has been done to date.
High public debt levels are still a major economic challenge for Zambia, resulting in the government struggling to raise sufficient resources for development needs, she added.
Zambia’s current external debt stands at 11.2 billion U.S. dollars. Enditem