Zambia seeks to borrow more to plug financing gap - CNBC Africa

Zambia seeks to borrow more to plug financing gap

Southern Africa

by Reuters 0

Zambia's Alexander Chikwanda seeks to borrow more to plug financing gap. PHOTOS: zambiareports

Zambia's finance minister has asked parliament to almost double the country's external borrowing limit to 60 billion kwacha ($8 billion)in 2015 to finance development projects as a financing gap has emerged.

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Chikwanda said total 2015 revenues were expected to decline by 2.1 billion kwacha below the budget projections and expenditure was projected to increase by 13.3 billion kwacha above the budgeted level.

"I will be requesting the house to increase the ceiling for external borrowing from the current 35 billion kwacha to 60 billion kwacha," finance minister Alexander Chikwanda told parliament on Tuesday.

The budget deficit had increased to 20 billion kwacha from the earlier projected 18.5 billion kwacha in the 2015 budget, he said.

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"Our debt is still very much within sustainable levels, even with the new intended borrowing. This may entail borrowing at commercial rates," Chikwanda said.

The slowdown in the global economy had led to weaker commodity prices, hitting output of the cooper producer. The estimated GDP growth for 2015 had been revised down to 5.8 percent from 7 percent, he said.