PMRC concerned over increased borrowing by Government

Policy Monitoring and Research Centre (PMRC) has expressed concern over increased borrowing by government without strengthening debt management mechanisms.

PMRC Senior Research officer Agatha Siwale has told Qfm News in an interview that while the levels of the country’s debt remain below the international thresholds of forty and twenty five percent for external borrowing and domestic debt respectively, certain concerns still arise from the recent moves by government to increase borrowing thresholds.

Ms Siwale explains that Zambia’s rapidly rising debt particularly if not accompanied by stronger public financial management poses a danger to high repayment costs especially as Zambia has increased its reliance on non concessional borrowing.

She says a default on loan repayment could also lead to a decline in investor confidence resulting in reduced willingness to lend to Zambia in future and crowding.

Ms Siwale says PMRC has since recommended that there should be serious strengthening of public financial and debt management by government and ensure comprehensive reform to Zambia’s domestic revenue mobilization mechanisms to avoid reliance on debt.

She further adds that borrowed funds should be specifically channeled to projects with the greatest impact on poverty reduction