• Domestic borrowing has crowded out local Small and Medium Enterprises.
• This has also made access to finance more costly and less accessible.
• Reining in of domestic borrowing will avail more resources to the private sector

Consumer Unity Trust (CUTS) has advised government to reduce its appetite for domestic borrowing which has crowded out local Small and Medium Enterprises (SMEs).
Speaking at a media briefing, Organization Acting Director, Angela Mulenga noted that this has also made access to finance more costly and less accessible, hence reining in of domestic borrowing will avail more resources to the private sector and spur growth, as private sector participation plays a key role in the growth of the economy.
Ms. Mulenga further called on government to strengthen fiscal controls to support transparent and accountable fiscal adjustment as well as address governance and corruption vulnerabilities.
“We applaud government for having secured the IMF Programme approval which a was key step in getting the restructuring process underway and paved way for the approval of the grant through the World Bank’s International Development Association (IDA), at a meeting of the Board held on Tuesday 25th October, 2022.”
“In the spirit of transparency, we implore government to work together with stakeholders such as CSOs and the media by making public information on Zambia’s public debt and publishing a timeline of the debt restructuring for the benefit of citizens to follow and to in-put. The ball is squarely in the court of the Ministry of Finance to lead the way in the public disclosure of the information and to expedite the establishment of the debt officer that will play a key role in providing oversight,” Ms. Mulenga explained.
She added that domestic resource mobilization needs to support the medium term adjustments to create fiscal space to increase social sector spending to cushion the burden on the most vulnerable and help reduce poverty.
“The ongoing expansion of the Social Cash Transfer Programme and plans to increase public spending on health and education are particularly welcome. But to have the intended impact, this will require efficient implementation and monitoring of the expenditure in these programmes,” she added.
She further called for the amendment of the Public Debt Management Act of 2022 to include provisions relating to Collective Agreement Clauses (CACs) and other conditionalities that may arise in dealing with international sovereign debt restructuring legislation.
Meanwhile, Ms. Mulenga observed that citizens remain negatively impacted and distressed by the high cost of living, attributed to factors such as the exchange rate and inflation rate which are key economic indicators that help gauge the economic performance.
“Zambia’s economic performance and the unsustainability of its public debt has continued to be a concern to the citizenry and many stakeholders across 5the country. Despite the reduction in the allocation towards debt servicing, the citizens remain negatively impacted and distressed by the high cost of living.”
“Notable as a result of the improved economic performance, the aforementioned indicators have recorded significant improvements,” Ms. Mulenga stated.