The Civil Society Organisation (CSO) Debt Alliance has urged government to address the rising domestic debt in the country.
CSO Debt Alliance Coordinator Peter Mumba observes that even as corresponding efforts to restructure external debt are being made, failing to do so may jeopardise the country’s path towards fiscal sustainability and potentially result in a relapse into unsustainable debt.
Mr. Mumba says it is imperative for the government to ensure that borrowing from the domestic debt market aligns with the targets outlined in the Annual Borrowing Plan.
He says government should also conduct regular sustainability assessments for both domestic and external debt to maintain sustainable levels and he adds that government should further continue implementing reforms aimed at strengthening domestic resource mobilisation, as this will play a crucial role in preventing over-reliance on borrowing from the domestic debt market.
In the recent past, domestic debt accumulation has risen significantly from K80.2 billion in 2019 to K193 billion in 2021.
As at end of June 2022, domestic debt stood at around K200 billion and it increased to about K240 billion by end of December 2022, accounting for over 40 percent of Zambia’s total debt stock.
