In a ministerial statement to parliament on October, 05 MinFin head Dr. Situmbeko Musokotwane pondered on one of the worst economic blunders Zambia has made in the last decade.
“The growth of external debt from less than $2 billion in 2011 to its current levels of about US$14.5 billion reflects one of the worst economic blunders during the last ten years and it has significantly contributed to the suffering we see today: The government was unable to hire key personnel like teachers, the exchange rate depreciating, rising inflation and many more,” Musokotwane said.
As a consequence of excessive debt, the red metal producer continues to grapple with double digit inflation in the twenties, sluggish growth, currency pressures and elevated interest rates.
The copper producers external debt including state owned entity debt guaranteed to creditors was reported at $14.48 billion compared to $12.91 billion reported as at mid-year of 2020 (ex. guaranteed SOE debt).
Musokotwane cited pandemic risks as having been added to Zambia’s inventory of hurdles namely fiscal vulnerabilities and its dutch disease on copper whose posture remains frail from mismanagement in the sector.
From preliminary estimates, the Southern African nation is estimated to expand north of 2.0% in 2021 evidenced by 0.5% in 1Q21 and 8.1% in 2Q21.
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