By KASONDE KASONDE

UNITED Nations (UN) under secretary general and Economic Commission for Africa (ECA) executive secretary Vera Songwe has said Zambia’s failure to invest borrowed money in the right places is one of the major reasons for the country’s debt crisis.

Dr Songwe said not all debt was bad as long as a country invests the money in areas or sectors that were able to contribute to economic development as well as to the repayment of the debt before it gains interest.

She said there was need to interrogate how the spike in debt contraction impacted Zambia’s economy and prospects for social economic development. Speaking at a public lecture at the University of Zambia (UNZA) on debt and Debt financing in the region with focus on Zambia on Wednesday Dr Songwe said between 2011 and 2015 the country’s debt portfolio grew to unsustainable levels hence the need to question how money was utilised.

“There is need for debt transparency which was a backbone for prudent use of the funds acquired through public debt especially that when well utilised debt had the potential to enhance development. Zambia should consider borrowing in local currency because borrowing in foreign currency is expensive,” Dr Songwe said

And UNZA Vice Chancellor Proffesor Annie Sikwibele said it was common knowledge that many countries in the region were currently grappling with the issue of unsustainable debt stock which had negatively affected all spheres of society.

Prof Sikwibele said the side effects of unsustainable debt were there for all to see both in the public and private sectors ,in public sector Government debt causes uncertainty leading to low investments in the economy.

She said external debt servicing also limits the available resources for the state to spend on the social sectors such as education,health and social security as well as the economic sectors that were critical to growth and development.

Prof Sikwibele added that higher education in most of the low income countries was directly affected by the shift of resources to debt service and drains the education sector was often one of the first social services that were negatively impacted.

Meanwhile UNZA lecturer under the school of economics Prof Manenga Ndulo said Zambia must work towards coming up with mechanisms on debt contractions to deter politicians from committing the country to expensive debt repayment programmes.