Zambia delays loan receipt as debt piles

Zambia has delayed the receipt of loans totaling $2.6 billion contracted last year, in order to rein in its soaring debt, the country’s Finance Minister, Margaret Mwanakatwe announced.

Zambia’s external debt at the end of the first quarter of this year had increased to $10.178 billion from $10.05 billion at the end of 2018, Mwanakatwe.

The debt pile had pierced the $10 billion level following a leap from $8.74 billion at the end of 2017.

The loans approved the previous year, covered infrastructure, energy, agriculture, health, education and defence.

“We are going to manage disbursement to be able to have a sustainable debt profile going forward,” Mwanakatwe said, without stating how long disbursement will be delayed for.

The International Monetary Fund (IMF) has repeatedly warned of Zambia ‘s struggle with high debts and shrinking foreign currency reserves.

Zambia’s 2018 fiscal deficit stood at 7.5% of gross domestic product (GDP), higher than an earlier government projection of around 7%.