ACTION Aid Zambia (AAZ) has commended Governement and the Creditors Committee for strides made towards debt restructuring in the country.
AAZ Country Director Nalucha Ziba says the country’s debt saga has been an issue for several years and the strides being taken are commendable.
“Action Aid Zambia (AAZ) would like to commend the Zambian Government and the Creditors’ Committee of Zambia, chaired by China, for their important and unprecedented strides towards debt restructuring and ultimate cancellation. Zambia’s debt saga has been an issue of debate for several years now – and the urgency for resolving this has been escalated by the COVID-19 pandemic,” she said.
She said over the past decade, the government had embarked on ambitious infrastructure development that fueled the need for domestic and external financing.
“The global economic fallout following Covid and the war in Ukraine made government debt unsustainable, rising as it did from 23.8 percent of GDP in 2014 to 141.3 percent of GDP by 2020 .This triggered Zambia’s debt default and led to the present plans to restructure the debt.
Given our diverse debt portfolio, AAZ recognizes the complex nature of these negotiations, particularly with the private creditors. Building on the current position and the provision of financing assurances, the Government must leverage the support of the Creditors’ Committee to ensure the agreement with the International Monetary Fund (IMF) is beneficial to the Zambian people,” she said.
She said currently, government of has made significant pronouncements for and commitments to all sectors of the economy
“Social sectors, such as education and health, have already seen numerous changes, such as the introduction of free education and the recruitment of teachers and health workers. However, to develop and sustain service delivery going forward, there will be a need for continuous investment in the civil service. This will require bold action to increase tax revenues through progressive and gender-responsive tax reforms,” she said.
She also advised however, that government should resist any pressure for public sector wage bill cuts or freezes that would compromise on service delivery, particularly in the health and education sectors.
“The recent recruitment of 30,496 teachers has been welcome, but with over 100,000 applicants and continuing shortages in some areas, the exercise revealed the need for more consistent and regular recruitment .Particularly in light of the large influx of learners since the introduction of free education in January 2022. There are clear alternatives, not least through taking action to increase Zambia’s tax to GDP ratios so that increased spending can be sustainably financed,” she said.
(Mwebantu, Tuesday, August 2nd, 2022)