GOVERNMENT will not start new projects but will seek parliamentary approval to issue a sovereign bond to finance the budget deficit and complete ongoing projects, says Minister of Finance Alexander Chikwanda.
Speaking yesterday in Lusaka at a meeting with visiting United Nations Economic Commission for Africa executive secretary Carlos Lopes, Mr Chikwanda said Zambia is facing economic challenges that are mainly induced by external factors.
“Export earnings have fallen and our ability to import is constrained, so we have revised downwards our growth rate from seven percent to 5.8 percent. We shall not have preference for new projects, of course we shall complete what we started and the shortfall in expected revenue will be offset through the Bank of Zambia that will sell some treasury bills and bonds,” he said.
Mr Chikwanda said the budget deficit has gone beyond projection.
“We are seeking parliamentary approval, if they allow us; we shall go to the international markets where borrowing is a little bit cheaper and get a series of funds,” he said.
He said Zambia’s greatest asset is its young population.
“But we need to convert this asset into dividends, so we need to arm them with skills and knowledge for them to utilise the immense opportunities in the country as well as the region which has better prospects,” said Mr Chikwanda.
And Dr Lopes said many African countries have doubled their gross domestic products during the past decade.
“However, this growth is not producing quality growth to result in job creation. We need structural transformation of the continent so that we fully utilise our potential in agriculture, increase value addition since exporting raw materials is transferring jobs to other regions and we need to modernise the services industry,” he said.