Zambian President Edgar Lungu has ordered a couple of sweeping measures that his government will take to bring the country back on a more sustainable debt trajectory, improve the fiscal position and entrench macroeconomic stability.
According to Lusaka Times, the new measures to address Zambia’s worsening debt crisis include; canceling some of the currently contracted loans that are yet to be disbursed to reduce the debt service outlays and to cut down on the cost of running the government by reducing expenditures related to both local and foreign travel.
The new austerity measures were announced by Finance Minister Margaret Mwanakatwe last Thursday. She noted that that President Lungu banned the issuance of letters of credit and guarantees to state-owned enterprises, terminated financing of the development projects that are below 80 per cent completion and cut down on ministerial travels with immediate effect.
"To cut down on the cost of running government by reducing expenditures related to both local and foreign travel, and workshops, the secretary to the cabinet has been directed by the President to immediately issue new travel guidelines that will reduce the number of travels and the size of delegations,” Minister Mwanakatwe said.
Mwanakatwe also announced that the Ministry of Finance has banned all government officials from making public statements on economic matters and debt contraction, going forward.
She said the making of several statements on economic and financial matters by unmandated government officials has continued despite a cabinet decision against the practice adding that this has sent wrong signals that have impacted negatively on the performance of the economy.
Mwanakatwe also announced that the debt sustainability analysis (DSA which has just been completed has confirmed that the total public external debt as at end-March 2018 amounted to US$9.3 billion, up from US$8.7 billion in 2017 while domestic debt stock (government securities) amounted to K53.5 billion from K48.4 billion over the same period.
"Let me again, emphasise that we have reconciled all the debt with all our creditors and hereby confirm the debt position,” Mwanakatwe stated.
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