No debt trap for Zambia, says Yamba

Zambia will not get into another debt trap following the recently borrowed US$1 billion sovereign bond, says Secretary to the treasury, Fred Yamba

Mr Yamba assured that Zambia will be meeting the interest payment and the loan would be repaid within 10 years.

“Currently our interest payment is about 1.8 per cent of our domestic revenue and so that means that we are able to pay our salaries, pay the interest on the current debt and going forward we will be remitting the interest payments,” Mr Yamba said.

And Mr Yamba said the latest US$1 billion sovereign would be invested in roads, railway, energy and agriculture.

Meanwhile Cabinet has approved the National Strategy for Development of Statistics (NSDS) and the national planning and budgetary policy.

He said currently Zambia’s GDP stood at US$21 while the debt stood  at US$3.1 million which was about 15 percent of the GDP.

“It becomes difficult if you are not remitting the interest payment because what will happen is that the interest will be compounded and once that happens then you get into trouble,” Mr Yamba said.

Addressing the Press in Lusaka yesterday Mr Yamba said the US$1 billion was bond was part of the expenditure in the national budget.

“It will be spent in the road sector, the railway, energy and we have issues related to the creation of new districts and also some money will go into agriculture,” Mr Yamba said.

“Government is not risking going into a debt trap. What we should understand is that, if we look at our GDP at one time, in the 90s was maybe K6 billion and our debt was close to US$6 billion,” Mr Yamba said.

Mr Yamba further Yamba said that Cabinet had approved the 2014-2018 National Strategy for Development of Statistics.

“The strategy will not only provide the basis for good governance but also provide the basis for improved governance and coordination of a system that meets demands of statistical information by the local and international community,

“It will also be in line with new development frameworks which demand that the government effectively gathers, stores and updates statistical data for effective monitoring, evaluation and better decision making,” Mr Yamba said.