Zambia’s Debt Threatens Vision 2030, SDGs-CTPD

The Centre for Trade Policy and Development (CTPD) has noted that while it takes note of the milestone that Zambia has taken in launching the Sustainable Development Goals Sub-Regional centre for Southern Africa, it remains concerned about the threat that Zambia’s debt presents to the achievement of both the SDGs and Vision 2030.

However, CTPD observed that the launch of the SDGs Sub-Regional Centre for Africa within Zambia presented an opportunity to address the risks to achieving the SDGs within the stipulated decade remaining.

“Mitigating against the impact of interest payments on social sector spending should be made a priority as Zambia continues to accumulate more debt. If Government continues to cut expenditure towards the social sectors in order to avoid defaulting on external debt, Zambia’s ability to achieve both the Vision 2030 and SDGs will be compromised,” CTPD has observed.

CTPD Executive Director Isaac Mwaipopo said in a recent analysis conducted by the organisation, research wing interrogating implications of debt on the implementation of SDGs and Vision 2030, it was learnt that rising Public debt continued to undermine efforts to actualize goals under the Vision 2030 and the SDGs.

Mr. Mwaipopo said since Government spending towards the Social Services affected the living standards of the most vulnerable groups such as children youths and women, debt accumulation had the potential to either positively or negatively influence Government’s ability to meet both the Vision 2030 and SDGs.

“It has been established that Zambia has increasingly spent more resources towards interest payments. In 2018 the country spentK13.6 billion towards debt serving as compared to only K1.1 billion in 2008. Most of the debt servicing has been with respect to domestic debt but external debt servicing has drastically increased over the period. Interest payments towards external debt are projected to surpass domestic interest expenditure in 2019. Government’s issuance of Eurobonds and continued accumulation of debt has resulted in increased interest payments which have steadily increased above health and education expenditure,” explained Mr. Mwaipopo.

Meanwhile, the Centre has advised Government to mitigate against the negative effect of interest payments on its allocations towards the education sector citing that Education is critical for development hence the need to reduce the number of children out of school.

Mr. Mwaipopo has therefore noted that it was commendable that debt accumulation had not affected public investment towards children within the health sector.

“The crowding out of Government expenditure towards the social sector has been found to be prevalent within the education sector while the health sector has remained a priority area resulting in lower child mortality, higher life expectancy and a general improvement of the human development indicator. Although debt has not crowded-out health expenditure, the reduced allocations towards education as a result of interest payments has resulted in lower primary school age. Debt accumulation therefore poses a great risk towards achieving the nation’s education target,” Mr. Mwaipopo explained.