World Bank: Zambia not in debt distress

The International Monetary Fund logo is seen inside its headquarters at the end of the IMF/World Bank annual meetings in Washington, U.S., October 9, 2016. REUTERS/Yuri Gripas

A World Bank economist said Thursday Zambia is not in debt distress but warned that the country could plunge into one if its debt continues growing.

World Bank Economist Ziv Chinara said the current debt situation in Zambia is within manageable levels and that the government needs to put a cap on borrowing to avoid getting into distress situation in the near future.

In remarks delivered during the bank’s launch of its 11th economic brief on Zambia, the economist urged the government to show serious commitments in implementing austerity measures announced earlier this year aimed at dealing with the debt problem as well as fiscal consolidation.

Chinara said disclosure of debt figures is vital to avoiding misinformation and to assuring investors and other stakeholders on the current debt situation.

On Wednesday, Minister of Finance Margaret Mwanakatwe said the government will start making quarterly reports on the country’s debts to avoid speculations.

Zambia’s debt has become a thorny issue in recent months, with the International Monetary Fund (IMF) suspending its talks with the government for a possible financial aid package.

According to government figures, the country’s foreign debt stood at 9.37 billion U.S. dollars as of June 2018, which is 34.7 percent of GDP, below the internationally agreed threshold of 40 percent.