. MUTATI
By MAIMBOLWA MULIKELELA –
FORMER Commerce, Trade and Industry Minister Felix Mutati has advised Government to slow down in the contraction of external debt this year.
Mr Mutati said it was important for Government to reduce on external borrowing because it might breach the benchmark for debt sustainability.
Mr Mutati explained that the safety level of debt sustainability was 40 per cent of the Gross Domestic Product (GDP), adding that Zambia’s economy reduced roughly by US$8.5 billion.
He said the current debt of almost $7 billion was way above the sustainable levels.
Mr Mutati said debt levels had soared following a repeat of non-concessional borrowing, making it more expensive to borrow from international debt markets.
“2015 was a turbulent year from an economic perspective. It was the most difficult year in the last 10 years.
“It will be remembered as a year in which all the economic measurement targets in terms of performance were never reached,” he said.
Mr Mutati said the convergence of both internal and external factors affected the economy, and increased the levels of poverty.
He said it was important for Government to put in place holistic measures to match expenditure with the reduced revenue.
