A CONSUMER BODY CALLS FOR THE REVISION OF THE LEGAL FRAMEWORK GUIDING DEBT MANAGEMENT

By Patrick Soko A consumer body has noted the need to revise the legal framework guiding debt management as high debt levels continue to be a major challenge for Zambia as evidenced on the county's inability to raise resources for development.

Kangwa Muyunda

The Consumer Unity Trust Society Cuts observes that the Covid19 has further intensified Zambia's debt situation and has forced the government to re-budget and revise expenditure. CUTS Programmes Officer Kangwa Muyunda recommends that as the government re-prioritizes the Budget, social sectors such as health, social protection and education must be prioritized. Some of the legislation which needs to be revised include the Loans and Guarantees (Authorization) act of 1994, the Public Finance Management Act and the yet to be enacted National Planning and Budgeting Bill. According to the International Monetary Fund which recently concluded its virtual mission visit, the social and macroeconomic impact of the COVID-19 shock, on top of a severe drought last year, will be heavy. Growth is forecast at around 5 percent in 2020 and the number of people living in extreme poverty is expected to increase. Fiscal pressures in 2020 have increased due to significantly lower revenue collections and higher spending needs. Speaking during a media briefing in Lusaka this morning Ms Muyunda pointed out that despite increasing debt levels there is a lack of Transparency, Accountability and participation in the management of debt which he said must be addressed. In the meantime, Zambia’s external debt stands about $11.20 billion available Data also shows that Zambia’s domestic debt is at K80.2 billion. And speaking at the same briefing Zambia Association of Manufacturers new Chief Executive Officer (CEO) Florence Muleya says domestic debt is crowding out private sector as banks prefer to lend to the government over the private sector. Speaking during a media briefing in Lusaka this morning Ms Muyunda pointed out that despite increasing debt levels there is a lack of Transparency, Accountability and participation in the management of debt which he said must be addressed. And speaking at the same briefing Zambia Association of Manufacturers new Chief Executive Officer (CEO) Florence Muleya says domestic debt is crowding out the private sector as banks prefer to lend to the government over the private sector.

Florence Muleya

She has therefore called on the Government to seek the International Monetary Fund package in order to give space the private sector borrow from local lenders. She feels and IMF package is ideal for Zambia owing to the conditions it comes with. #Presspoet2020