Zambia’s public sector debt rises to almost $32 bln in 2021 – finance ministry

PUBLISHED: Thu, 24 Mar 2022 08:27:07 GMT
Rachel Savage
Reuters
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UNITED STATES – APRIL 25: Situmbeko Musokotwane, finance minister of Zambia, left, speaks as Mustafa Mkulo, finance minister of Tanzania, center, and Charles Koffi Diby, finance minister of the Ivory Coast, listen during a press briefing in Washington, D.C., U.S., Saturday, April 25, 2009. The global economic crisis may force as many as 90 million more people into extreme poverty this year and make it harder to meet goals to improve health and education, the World Bank and International Monetary Fund said yesterday. (Photo by Joshua Roberts/Bloomberg via Getty Images)

JOHANNESBURG, March 23 (Reuters) – Zambia’s public sector debt rose 18% to $31.74 billion by the end of 2021 from end-June, a finance ministry document published on Wednesday showed, at a time when the country is negotiating to restructure its crippling debt.

Foreign currency debt accounts for 54% of Zambia’s borrowing, rising 2% in the second half of 2021 to $17.27 billion. Local currency debt jumped 43% to $14.47 billion.

In 2020, Zambia became the first country to have defaulted in the pandemic-era, buckling under a debt burden of more than 120% of GDP.

It reached a staff-level agreement with the International Monetary Fund (IMF) in December 2021 on a $1.4bn three-year extended credit facility.

Finance minister Situmbeko Musokotwane told Reuters in February that he hoped to get a formal IMF agreement signed off in May, but the timeline was deemed ambitious by analysts as the group of Paris Club creditors and China have yet to form a creditor committee. Read full story

President Haikainde Hichilema pledged to deal with the “unsustainable” debt burden when sworn in as Zambia’s new leader in August 2021. Read full story

(Reporting by Rachel Savage; Additional reporting by Karin Strohecker; Editing by Emma Rumney and Vinay Dwivedi)

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