Minister of Finance has disclosed that the total combined accumulative debt for all local authorities in the Country as at 30th June is estimated at 2.8 Billion Kwacha.
Speaking during the launch of the Local Government Debt Management Strategy, Dr. Bwalya Ng’andu said of the K2.8 Billion Kwacha Debt, Statutory Obligations accounted for the largest share at 77.6 per cent.
“Just to put this debt problem into perspective, the total combined accumulative debt for all local authorities as at 31st December 2018 was k1.6 billion, this figure rose to about k2.4 billion as at 31st December 2019, and was estimated at k2.8 billion as at 30th June 2020,” Dr. Nga’ndu revealed.
Dr. Ng’andu said the breakdown of the Statutory Obligation Debt shows that National Pension Scheme Authority (NAPSA) accounts for the larger share at K1.35 Billion, while Pay as You Earn (PAYE) to Zambia Revenue Authority (ZRA) is at K616.5 Million.
He said K238.1 Million is accounted from unmerited pension contributions to the Local Authorities Superannuation Fund (LASF) and Personnel related debt terminal benefits accounted for K158.8 Million.

“This level of debt is worrying and poses real challenges and risks to local authorities and associated institutions,” he said.
“If not reversed, this debt level is potentially disruptive with far reaching negative consequences which include placing a huge financial burden on the treasury, undermining local authorities’ effectiveness in implementing their programs, undermining the viability of the pension funds especially the local authorities’ superannuation fund, robing employees of their future security on account of non-remittance of contributions to pension funds, delaying the successful implementation of fiscal decentralization in local authorities and contributing to general macroeconomic instability,” the Minister of Finance said.
And speaking at the same event Local government Minister Charles Banda revealed that the Permanent Secretary from his ministry has engaged LASF, NAPSA and ZRA to liquidate the colossal Statutory Debt.

“As proof of my ministry’s commitment to liquidate local authorities’ debt, the permanent secretary has engaged LASF, NAPSA AND ZRA in order to liquidate this colossal statutory debt which is key to the implementation of the debt strategy,” he said.
Dr. Banda has since urged local authorities to treat the debt management strategy as a tool that will guide how to halt accumulation of debt, and dismantle the existing debt in the local authorities.
“The government will continue to support and supplement the local authorities efforts on bringing development to the community we serve,” Dr. Banda said.
He says the document has come at an opportune time so that government can find innovative methods of dealing with the escalating local authority’s debt that now stands at an estimated K2.8 billion as at 30th June, 2020.