Advertisement

Faith, Civil Leaders Laud Zambia’s Government for “notable positives” in Economic Recovery

Zambia flag. Credit: Public Domain

Members of the Civil Society Organization (CSO) Debt Alliance in Zambia have lauded the country’s government for what they have described as “notable positives” in recovering the Southern African nation’s ailing economy.

In a Monday, January 24 statement, CSO Debt Alliance officials who include members of the Jesuit Centre for Theological Reflection (JCTR) and Caritas Zambia express hope that the government will continue engaging in constructive dialogue with private creditors to secure a deal on comparable terms to eliminate the country’s dues.

“Under the new administration government, the Zambian economy has posited some notable positives suggesting that the efforts to recalibrate the ailing economy through favorable and stable policies will begin to pay off,” CSO Alliance members say.

They add, “The gain in the currency whose effect has trickled down into other areas of the economy can be noted. This is in tandem with goodwill from the international community which has seemingly further pushed the notable gains in the direction of economic resurgence.”

Members of the Debt Alliance that consists of organizations and individuals who have a vested interest in public debt management in Zambia also commend the Zambian government “for the strides made so far in reaching the Staff Level Agreement (SLA) with the International Monetary Fund (IMF) and the swift turnaround in achieving the much-needed agreement.”

Advertisement

“The SLA will accord the government a chance to free up resources and channel them into key sectors of the economy as it works to change the economic disposition of the nation,” they say.

The IMF and Zambian authorities team reached a new arrangement under the Extended Credit Facility (ECF) for 2022-2025 to help restore macroeconomic stability and provide the foundation for an inclusive economic recovery.

CSO Alliance members, however, say they remain concerned about the extent of Zambia’s debt portfolio and its debt service levels.

“This is evident in the 2022 National Budget, where international protocols around social sector spending remain breached due to high debt service. Hence, the need for the Government to push towards debt restructuring,” they say.

In the statement signed by JCTR Executive Director, Fr. Alex Muyebe, CSO Alliance members offer some recommendations to the government as it implements the 2022 National Budget.

More in Africa

They have urged the country’s new government to state its position on the Economic Recovery Plan (ERP) that was launched by the Zambia's former President Edgar Chagwa Lungu in December 2020 with an aim of salvaging the nation's economy, which declined due to the impact of the COVID–19.

CSO Alliance members say the ERP had “clear, measurable plans on debt management as well as priority economic reform areas.”

ERP, which was expected to be implemented between 2020 and 2023, has the aim of restoring macroeconomic stability, diversifying and restoring growth of the economy, safeguarding social protection programs, doing away with domestic dues, and avoiding accumulation of new debts.

CSO Alliance members further urge the government to “promptly disclose” the economic policy document that is being used to engage with the Group of 20 nations (G20), Paris Club countries, and the IMF concerning debt management.  

Zambia applied for a debt treatment under the common framework agreed by G20 nations and the Paris Club, a group of officials from major creditor countries whose role is to find coordinated and sustainable solutions to payment difficulties experienced by debtor nations, in November 2020.

Advertisement

CSO Alliance who commended the government for releasing public debt figures up to June 2021 have also urged the authorities to make this public disclosure a semiannual activity as of June and December of each year.

They have also suggested that President Hakainde Hichilema-led government establishes a “home-grown Debt Sustainability Assessment to ensure that the risk of debt distress is averted in a timely manner without the complete reliance on the IMF/World Bank assessment.”

Further, the Alliance members urge the government to start working on “a robust and more comprehensive fiscal regime for the mining sector that will not only promote investment predictability but also ensure optimal benefits to the country.”

They add that the country’s leadership “should design a robust domestic resource mobilization strategy to meet its high revenue estimates in the 2022 National Budget and beyond.”

In their January 24 statement, CSO Alliance members propose that the government undertakes comprehensive performance evaluation of State-owned enterprises.

(Story continues below)

The evaluation, they say, will help “to ascertain the viability of these entities; drawing from the findings and recommendations, government should then institute reforms and explore financing opportunities through Public Private Partnerships.”

“This would go a long way in easing Zambia’s debt burden, especially Publicly Guaranteed Debts,” CSO Alliance members say, referencing the proposed evaluations.