ActionAid attributes economic downgrade to increased cost of living

ActionAid Zambia Country Director Nalucha Ziba

ActionAid Zambia has attributed the downgrading of Zambia’s economic rating from B2 to B3 by Moody’s credit rating agency to sustained deterioration in fiscal and debt metrics.

Briefing journalists in Lusaka this morning, ActionAid Zambia Country Director Nalucha Ziba says the downgrade is due to a number of factors such as the increase in the cost of living, depreciation of kwacha and the fall in copper prices which is Zambia’s mainstay and major source of foreign revenues.

Ms Ziba has advised government to come up with a clear direction for taxation as this will help ease the troubles currently being faced with the falling kwacha and eminent rising interest rates.

She says given the current challenges in the country, it is imperative that government ensures fiscal prudence and focuses on curbing tax avoidance as a lasting solution.

Ms Ziba has further urged government through the Ministry of Finance to urgently revise the restrictive tax treaties and tax incentives Zambia currently has in place due to the potential for multinational corporations taking advantage of such laws, which result in tax avoidance and the negative impact on the country’s national budget and subsequently public services.