Report reveals Zambia’s debt is still sustainable

The latest Debt Sustainability Analysis (DSA) Report has indicated that Zambia’s total public debt both internal and external remains sustainable under the current policy scenario.

And Zambia’s current debt stands at four point eight billion US dollars (US$ 4.8 billion).

Speaking during the launch of the Report in Lusaka this morning, Secretary to the Treasury Fredson Yamba says results of the Debt Sustainability Analysis reports of 2007, 2012 and 2014 all reveal that Zambia’s public debt is sustainable in the medium to long term, mainly on account of the strong macroeconomic performance the country has experienced.

Mr Yamba says accessing financing on the international capital market has been necessitated by limited concessional financing available for government to fund the huge deficit on the development programme agenda aimed at growing the economy and ultimately improving the welfare of the people of Zambia.

He states that the 2014 DSA was conducted against the backdrop of notable developments in Zambia’s debt financing.
Mr.Yamba says Zambia successfully issued a second Eurobond in April 2014 amounting to US$1 billion following its debut US$750 million Euro bond in September 2012.

Mr. Yamba further states that the 2014 External Debt Sustainability Analysis results show that the overall risk of external debt distress for Zambia remains low.

He says notwithstanding the two recent issuances in the Eurobond market all the debt burden indicators remain below their indicative threshold, except the external debt-service-to-revenue ratio which is projected to exceed the applicable benchmark in 2022 and 2024.

Government undertook a Debt Sustainability Analysis in collaboration with the Macroeconomic and Financial Management Institute of Eastern and Southern Africa from 13th to 26th June 2014 whose objective was to assess the sustainability of Zambia’s current level of debt and the prospective new borrowing requirements in the medium to long term.