THE World Bank Assessment Report on Debt Transparency among International Development Associations (IDA) countries has exposed Zambia’s lack of transparency on debt reporting.
The Assessment Report on the availability, completeness and timeliness of public debt statistics and debt management documents posted on national authorities website published on April 1, this year, revealed the lack of transparency on Zambia’s debt reporting and that there was partial information available about the country’s contracted loans.
It also revealed that of the 36 per cent of IDA countries researched on, debt disclosure standards were still poor, with data either absent or deemed insufficient or too old to qualify, compounded by the limited accessibility of debt information in Zambia, which is only the Ministry of Finance website.
“Partial information available on the last loans contracted. Explanation: the annual economic report provides with the names of the creditors and the amounts. Financial terms are not indicated. Data accessibility: single-source. Explanation: Annual economic report and budget speech (guaranteed debt),” the Report read.
It showed that there was limited coverage of debt statistics and that neither Local Government (LG) nor State-Owned Enterprise (SOE) debts were discussed.
“Reporting is on an annual basis. There is limited coverage as the annual economic report does not provide with coverage of government debt. Neither debt from LG and SOE debts are discussed,” it disclosed.
And the Report revealed that most of the debt information reported was usually outdated.
“Time lag: six months. The 2018 Annual Economic Report published in the course of 2019 contains end-December, 2018, debt data,” added the Report.
And the World Bank maintained that debt transparency remained critical if potential lenders would better understand their prospective borrowers.
“In the context of rising public debt levels, debt transparency has become of critical importance for several reasons: creditors need to fully assess the debt sustainability of their potential borrowers, citizens need to be able to hold their governments accountable for the debt they take on, and borrowers need to design strategies based on a clear understanding of the level and cost/risk profile of their debt portfolio. One of the pillars of debt transparency is the dissemination of timely, comprehensive, and accurate data,” the Report stated.
Meanwhile, of the 36 per cent of IDA countries researched on, debt disclosure standards still remained poor, with data either absent or deemed insufficient or too old to qualify.
“Results of the April, 2020, assessment show that almost half of the countries we researched publish a medium-term debt strategy, although less than 10 per cent translate it into their annual borrowing plans. However, gaps remain: in 36 per cent of IDA countries, debt disclosure standards are still very poor, with data either absent or deemed insufficient or too old to qualify (prior to 2018),” read the Report.