A local economist has advised Government to analyse and assess its capacity to service its debts before it considers to increase its domestic and international borrowing threshold.
Mr. Yusuf Dodia who is also Private Sector Development Association (PSDA) Chairperson says the proposed increase in domestic borrowing from K200 million to K13 billion was huge and demands thorough consideration.
ZANIS reports that Mr. Dodia said this in an interview in Lusaka today.
He said that failure on the part of government to service such debts that will be acquired from domestic suppliers risks stifling the country’s economy.
He said government needs to have a plan and strategy on why it wants to borrow in order not to fall into a debt trap.
He said government’s sentiments that it wants to increase domestic borrowing threshold in order to implement certain projects because of a budget deficit does not hold water.
Mr. Dodia said this is because the Zambia Revenue Authority (ZRA) last year collected in excess of K500 million of its target and wondered why the country would have a budget deficit.
He said Government should only borrow when there is a legitimate reason for borrowing such as if the money was meant to invest in capital projects that will guarantee substantial returns.
The Lusaka based economist said that it is also imperative for government to consult key stakeholders when implementing certain policies in order for it to have a robust consensus on decisions that it makes for the benefit of the people.
He said dialogue was critical in ensuring that right choices are made that stand to improve the living standards of the people.
Finance Minister Alexander Chikwanda recently moved a motion in parliament proposing to increasing the domestic borrowing threshold from K200 million to K13 billion.