Economist Chibamba Kanyama has advised that government needs to cut down on getting new external debt as a measure towards revamping the Bank of Zambia Foreign Reserves.
Mr. Kanyama has told Money FM News that low foreign reserves affect the country’s ability to service external debt.
Mr. Kanyama maintains that this is the main cause for the dwindling of foreign reserves.
Mr. Kanyama says the country had always maintained months import cover worth over 3 months and the current one and a half Months’ worth of import cover is not enough.
He says this could lead to a shortage of foreign currency and failure to import products from other countries and in the end affecting the formulation and implementation of policies.
Mr. Kanyama has therefore advised that the central bank should create strategies that will work to rebuild the foreign reserves.
Bank of Zambia (BOZ) disclosed that the international reserves declined from $163 billion (1.9 months of import cover) to $1.5 billion (representing 1.8 months of import cover) recorded at the end of September 2018 mainly driven by external debt service payments.

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