The Zambia Institute for Policy, Analysis and Research (ZIPAR) says the planned debt servicing for 2018 estimated at K14.1 billion is still high.

ZIPAR Senior Research Fellow Shebo Nalishebo says during January to June 2018, Government spent two thirds of the planned Budget to service its debt amounting to K9.1 billion.

Mr. Nalishebo says external debt servicing, at 63% of the approved budget, was nearly just as high as domestic debt servicing at 65%.

“Interest payments on external debt reached 72% of the planned spending in 2018, while interest payments on domestic debt were 64% of the approved budget on domestic debt servicing,” he has said.

He notes that although amortisation (the paying off of debt through regular payments) on external debt was consistent with the target 51%, amortisation on domestic debt was higher than the approved budget and is likely to be a major source of spending overruns in the second half of the year.

Meanwhile, the ZIPAR Senior Research Fellow says customs and excise duties underperformed – against a target of K3.7 billion for the first six months of 2018, only K3.0 billion was collected.

“Particularly, excise duties had a relatively poor performance – against a target of K2.1 billion, collections from excise duties were K1.4 billion. This translates to an under-collection of K667 million during the first half of the year,” he has said.

He says considering that imports have been on the rise in the first half of the year, this seems to suggest a challenge on the domestic side of excise duties.

Mr. Nalishebo says some measures introduced in the 2017 and 2018 Budget such as increasing excise duty on air time from 15% to 17.5%; the aligning of excise duty to 125% on methylated spirits may either be having a dampening effect of reducing consumption and therefore the taxes, or have not been fully implemented.