THE Jesuit Centre for Theological Reflection (JCTR) says the national debt crisis is crippling Zambia’s efforts in addressing the effects of the COVID-19 pandemic.

In a statement, Wednesday, JCTR executive director Fr Alex Muyebe said that interventions aimed at resolving the debt crisis such as making available debt service resources had undermined Zambia’s capacity to respond to the life-threatening impacts of COVID-19.

“The current national debt crisis is crippling Zambia’s efforts in addressing the effect of the COVID-19 virus in Zambia. The JCTR has observed that the government’s efforts to drive the national development agenda is being hampered by lack of resources, a situation that has been worsened by the country’s indebtedness and the emergency of COVID-19,” Fr Muyebe said in a statement.

“The pandemic has not only exposed the country’s fragile economic situation, but also the dilemma faced by government in addressing the twin crises of unsustainable national debt and the unrelenting COVID-19. Interventions aimed at resolving the debt crisis such as making available debt service resources definitely undermine the country’s capacity to respond to life threatening impacts of COVID-19.”

Fr Muyebe added that the country’s sovereign bond defaults had equally made it difficult for the country to mobilise the required resources.

“Zambia’s external debt, most of which is owed to private creditors, has exposed Zambia to many fiscal risks. For instance, the macroeconomic fundamentals like economic growth, inflation rate, and exchange rate have continued to perform poorly primarily because of the current debt obligations. The country’s sovereign bond defaults may make it difficult for the country to mobilise the required resources, not only for steering the economy towards recovery, but also for fighting against COVID-19,” Fr Muyebe said.

“Zambia is financially constrained to adequately find resources to invest in the social sector, especially the health sector, which require massive resources to contain the spread of the second wave of COVID-19 infections. The fight against COVID-19 requires a lot of resources to address the plight of the overwhelmed frontline public health workers who are constantly confronted with shortage of test kits, oxygen and bed space for admission of COVID-19 patients.”

He called on government to put in place measures to avoid accumulation of more debt by enacting legislation to provide for parliamentary oversight on debt contraction.

“Recently, the Ministry of Health was compelled to open up Maina Soko Hospital and Zambia Air Force (ZAF) health facilities to COVID patients to decongest the University Teaching Hospital (UTH) and Levy Mwanawasa Hospital. Private hospitals have now been allowed to step in and complement the government’s efforts by attending to COVID-19 patients as it is evident that public health institutions alone cannot handle COVID patients. The Ministry of Health has also reported that more COVID cases are now being treated at home than in the public health facilities. These developments highlight the magnitude of the challenge at hand,” said Fr Muyebe.

“JCTR would like to point out that both scenarios, of having COVID-19 patients being treated in private hospitals and being treated at home leave out a large section of the Zambian society – poor individuals and vulnerable households who can neither afford private hospitals nor have resources to take good care of their patients at home. The current twin crises of debt and COVID-19 in Zambia is injuring the poor, and this situation must not be allowed to continue. JCTR, therefore, calls on Zambia’s creditors to provide the much-needed debt relief on the country for the sake of the majority poor Zambian people who are reeling under the pressure of these twin crises. At the same time, JCTR calls on government to put its house in order to avoid ever treading again on this trajectory of indebtedness by pushing through legislation to provide for parliamentary oversight over debt contraction and to ensure transparent, accountable and prudent use of public resources.”

Data from this year’s budget shows that K27 billion is due to be spent servicing Zambia’s external debt alone, up from last year’s K21.1 billion allocation, representing 23 per cent of the total budget amount.

Domestic debt servicing has equally increased to K18.3 billion this year, up from K12.6 billion allocated in last year’s budget.

Zambia’s total external debt stock drastically increased to hit a total of US $27.3 billion as at end-December, 2019, mainly comprising of public and publicly-guaranteed debt of over US $11billion, according to the World Bank.