ACTUALIZE DEBT REPAYMENT SINKING FUND, GOVT ADVISED

By Lumbiwe Mwanza

THE obligations tied to servicing Zambia’s debt still remains on diverting resources away from crucial services and development initiatives hence the need to establish and actualize a sinking fund from which resources for debt repayment will be drawn, the Centre for Policy Trade and Development (CTPD).

CTPD Executive Director Isaac Mwaipopo told The Scoop that the need to effectively manage and restructure bilateral debt portfolios was of paramount importance.

Mr. Mwaipopo noted that this year, the stock of total public debt had remained significantly high at US$25.4 billion as at the end of the first quarter, warranting careful consideration of debt sustainability.

“Making efforts to increase domestic resource mobilization is one sustainable way of financing development aspirations. As the Government is pondering on presenting the 2024 National Budget, it should consider establishing and actualizing a sinking fund from which debt repayment can be actualized,” Mr. Mwaipopo said.

He said that establishing a sinking fund had been in the Government’s plan but that efforts to actualize the sinking fund had not been scaled up.

He said that the Government should implement prudent expenditure reforms to mitigate public spending and address fiscal deficits.

He said that as much as fiscal policies had been actively engaged in efforts to curtail the deficit, challenges in tax administration and evasion had posed hurdles in achieving desired revenue targets.

He noted that Zambia’s economy had continued to face some challenges such as inflationary pressures and exchange rate fluctuations.

He said that the Government should strengthen tax administration and enforcement to bolster revenue collection and overcome the poor performance of domestic Value Added Tax (VAT).