The Consumer Unit Trust Society (CUTS) International Zambia Chapter observes the need to address Zambia’s debt crisis as it can affect the economy.
CUTS International Zambia Assistant Policy Analyst Kangwa Muyumba says the debt situation needs to be addressed as it may lead to hard economic times for all Zambians now and also in the future.
Ms Muyumba says the alarming rate, at which debt has been rising has impacted the economy negatively, contributing to the Kwacha depreciating and increasing inflation.
She says this impacts consumers and contributes to slow economic growth.
She adds that the implications trickle down to ordinary Zambians who end up being taxed more while public service provision declines.
The CUTS International Zambia Assistant Policy Analyst says businesses and employees also feel the burden as the cost of doing business increases and may potentially lead to job losses or businesses closing down.
“The situation needs to be addressed as it could lead to hard economic times for all Zambians now and also in the future. This article will explore some of the ways the Government can tackle the debt situation, which will influence the way Zambia’s economic future plays out over the coming years,” she said.
“By far the most important step toward getting the best deal for Zambia and reducing the impact of debt on the Zambian people, is to rebuild market confidence in our economy. There are several steps to doing this in the short, medium and long term, which will help put Zambia on a more sustainable trajectory.”
She has emphasized that there is no doubt that Zambia’s debt has been rising dramatically.
“In 2011, total debt was recorded at US$3.5 billion and as of March 2018, this has risen to US$14.4 billion. These debt levels are alarming: it has been almost one year since the IMF declared Zambia at high risk of debt distress, and during this time, debt has risen significantly. Zambia’s debt risk has also made international news, with the Economist running two articles on Zambia’s debt in a recent edition,” said Ms Muyumba.
“However, more often than not, the people that talk about debt are economists. Talk of bond yields, debt to GDP ratio, foreign exchange reserves and exchange rate risk are important but can be confusing. But we all need to discuss debt as it affects individuals, businesses and public services. Over the next six weeks, CUTS will explore why Zambia’s debt should concern us all — what it is and why it matters.”
She believes that Zambia may be on its way to a debt crisis, further believing that as a country Zambia has time to act to prevent this.

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