Lusaka – Zambia’s new government laid out its plan to restore financial stability on Friday, presenting a new budget as it engages with international lenders over its crippling debt.
Finance Minister Situmbeko Musokotwane unveiled a $9.8 billion (8.5 billion euro) budget – dwarfed by external debts of $14.7 billion that caused the nation to default during the pandemic.
“The government has applied for a debt restructuring,” he said. “The government is actively engaging the International Monetary Fund for a funded programme. It is very imperative that Zambia gets support from the IMF for our economic reform programme.”
Once Zambia wins IMF support, Musokotwane said the government would try to restructure its other debts by March.
ALSO READ | Zambia finds $2bn more debt on books, with China major creditor
“There is no option to this. Otherwise the debts we owe will choke this nation to a standstill,” he said.
The minister also set a target of bringing inflation down to single digits next year, from the current level of 21.1 percent.
He also said the government would increase funding to the agencies fighting corruption.
Debt had ballooned under the government of Edgar Lungu, who was toppled in August elections by veteran opposition leader Hakainde Hichilema.
Lungu was accused of borrowing heavily to splash out on infrastructure projects during his six-year tenure.
Despite vast reserves of copper and other minerals, Zambia’s economy contracted in 2020 – the first recession since 1998.
Follow African Insider on Facebook, Twitter, and Instagram
Picture: Getty Images
Source: AFP
For more African news, visit Africaninsider.com
