by Mirriam Chabala on 25 Apr 2019by Mirriam Chabala on 25 Apr 2019by Sipilisiwe Ncube on 25 Apr 2019by Sandra Mulenga on 25 Apr 2019
- Goal Diggers
by Abraham Kalito on 27 Mar 2019by Abraham Kalito on 26 Mar 2019by Abraham Kalito on 26 Mar 2019by Abraham Kalito on 26 Mar 2019
by Stuart Lisulo on 25 Apr 2019by Stuart Lisulo on 24 Apr 2019by Mirriam Chabala on 24 Apr 2019by Stuart Lisulo on 23 Apr 2019
by Joseph Mwenda on 25 Apr 2019by Daniel Chansa on 25 Apr 2019by Zondiwe Mbewe on 25 Apr 2019by Zondiwe Mbewe on 25 Apr 2019
- Editor's Choice
by Diggers Reporter on 4 Mar 2019by Andyford Mayele Banda on 29 Jan 2019by Davies Mwila on 22 Jan 2019by Diggers Reporter on 17 Jan 2019
by Diggers Editor on 25 Apr 2019by Diggers Editor on 24 Apr 2019by Diggers Editor on 22 Apr 2019by Diggers Editor on 19 Apr 2019
by Diggers Correspondent on 23 Apr 2019by Felix Kashweka on 2 Apr 2019by Thomas Mulenga on 29 Mar 2019by McQueen Zaza on 26 Mar 2019
- Guest Diggers
by Dr Munyonzwe Hamalengwa on 18 Apr 2019by Chisoni Mumba, PhD on 14 Apr 2019by Dr Chisoni Mumba, PhD on 28 Mar 2019by Sishuwa Sishuwa on 25 Mar 2019
Zambia’s external debt breaches 40% GDP thresholdBy Stuart Lisulo on 20 Mar 2019
Zambia’s external debt of over US $10 billion has breached the internationally-acceptable threshold of 40 per cent relative to Gross Domestic Product (GDP), data shows.
And the Zambia Institute for Policy Analysis and Research (ZIPAR) says the country’s increased total public debt has moved Zambia closer to a debt crisis.
According to data contained in the Ministry of Finance’s Green Paper, Zambia’s estimated GDP for the 2019 fiscal year stands at K300,169,200, roughly equivalent to around US $25 billion, while the country’s external debt has leaped to US $10.05 billion by the end of last year.
This means that Zambia’s external debt to GDP ratio has now increased to 40.2 per cent, breaching the acceptable limit of 40 per cent.
The acceptable and sustainable external borrowing threshold in Zambia is 40 per cent of GDP.
As far back as 2014, Zambia’s external debt was only around US $4.7 billion, representing a debt-to-GDP threshold of around 15 per cent.
But as late as the end of the second quarter of 2018, the stock of external debt had rapidly climbed to US $9.37 billion, representing around 34.7 per cent of GDP and was still below the internationally-agreed threshold of 40 per cent.
However, since the external debt kept rising to hit US $10.05 billion by the end of last year, Zambia’s debt-to-GDP ratio breached the 40 per cent threshold.
Coupled with domestic debt that had equally increased to K58.3 billion at the end of 2018, compared to K48.4 billion in 2017, the combined public debt to GDP ratio likely hit Fitch Ratings’ revised projections of 69 per cent of GDP by the end of 2018, up from 60 per cent recorded in 2017.
And commenting on the increased debt levels, ZIPAR research fellow Shebo Nalishebo stated that the country’s increased total public debt had moved Zambia closer to a debt crisis.
“Considering the estimated GDP for 2019 is K300bn, the new external debt numbers suggest that we have now breached the 40 per cent threshold for external debt (i.e. $10.05bn*K12/$ /GDP). We are already in breach of the debt to revenue threshold, therefore, that much closer to a crisis,” stated Nalishebo in response to a press query.
A country’s debt-to-GDP ratio is the ratio between a country’s government debt (measured in units of currency) and its Gross Domestic Product (GDP) (measured in units of currency per year).
A low debt-to-GDP ratio indicates an economy that produces and sells goods and services sufficient to pay back debts without incurring further debt.
About Stuart Lisulo
Stuart Lisulo is an experienced Zambian journalist with a focus on business news.
Email: stuart [at] diggers [dot] news
- We’re not being greedy by hiking tariffs, we need to survive – Zesco - 25 Apr 2019
- Debt servicing has left govt little money to meet obligations – BoZ - 24 Apr 2019
- Lumwana posts Barrick’s highest Q1 copper production - 23 Apr 2019
- KCM freezes new recruitment - 17 Apr 2019
- World Bank picks Zambia to pilot human capital project - 15 Apr 2019
- Debt servicing has left govt little money to meet obligations – BoZ
- Nkomeshya's Soli Establishment obtains injunction to halt ZAF, Kingsland City project
- ZAF officer in court for torturing 11-year-old niece
- NDC will work with UPND in 2021 if Zambians want us to - Kambwili
- UPND still strong in Kasama, despite GBM departure - Mulenga
Subscribe for email alerts
ArchivesMay0 PostsJun0 PostsJul0 PostsAug0 PostsSep0 PostsOct0 PostsNov0 PostsDec0 Posts
- April 2019
- March 2019
- February 2019
- January 2019
- December 2018
- November 2018
- October 2018
- September 2018
- August 2018
- July 2018
- June 2018
- May 2018
- April 2018
- March 2018
- February 2018
- January 2018
- December 2017
- November 2017
- October 2017
- September 2017
- August 2017
- July 2017
- June 2017
- May 2017
- April 2017
- March 2017
- February 2017
- January 2017
- December 2016
- November 2016
- October 2016
The News Diggers
Deputy News Editor
Plot No. Lus/9812/649-MC8
off Alex Chola Road
P.O. Box 32147
Telephone or WhatsApp:
diggers [at] diggers [dot] news
editor [at] diggers [dot] news
Send this to a friend