PS: Govt Working To Control Appetite For Borrowing

PS: Govt Working To Control Appetite For Borrowing

Ministry of Finance Permanent Secretary Mukuli Chikuba says government is working hard to control its appetite for borrowing.

“Government has come up with a number of measures to ensure that the debt distress is dealt with. As a country, we have had a number of challenges which we faced in the past years and these challenges have been bordered on some external imbalances that came up and Zambia’s case was actually worsened by the drought that caused a bit of difficulties in terms of food and that’s why you see all those dips about Zambia because they were further exaggerated by a number of vulnerabilities. So in terms of boosting the economic buffers, government has come up with the economic stablisation and growth programme which is the basis upon which we have also been engaging with the IMF and other cooperating partners. So that is one of government’s fiscal consolidation measures,” said Chikuba.

“Then what government has done is that we have done the consolidation process around agriculture and FISP in particular and I am glad to note also that under fuel there are no longer arrears that are building up. Apart from these pronouncements, government has now decided that fiscal consolidation should be embedded in law. So we have embarked on a number of legal reforms and just today, Cabinet is looking at a number of them and some of the regulations that we are looking at to be revised is the loans and guarantees Act to bring in Parliament in terms of contraction of loans and we are hoping that this could be passed before Parliament closes. We also have a planning and budgeting bill where it will be mandatory to do appraisal of projects before they are rolled out into the budget.”

Meanwhile, a research fellow from ZIPAR, Shebo Nalishebo, observed that the country’s wage bill still remained high.

“We have seen that the wage bill is in check now but it still remains quite high. At the moment, the wage bill increased from about 38 per cent of domestic revenues in 2014…and it went up to 52 per cent but it is been going down a little bit and now it is around 48 per cent. And so you really wonder what the problem is or the main sources of pressure is in public finances. Internationally or within the COMESA region, it is advised that we need to keep our wage bill around 35 per cent of the domestic revenues. So are still quite a long way in doing this,” said Nalishebo.