By MAIMBOLWA MULIKELELA –
THE latest Zambia Debt Sustainability Analysis report has called for continued improvement of policies and public institutions to enhance Zambia’s fiscal credibility.
This will also enable the country to achieve higher debt sustainability threshold under the Debt Sustainability Framework (DSF).
The report for 2014 indicated that the quality of the country’s policy and institutions had a bearing on the credit rating and other key assessment criteria such as the Country Policy and Institutional Assessment (CPIA).

. Yamba

Secretary to the Treasury Fredson Yamba said during the launch of the report in Lusaka on Tuesday that Government realised the importance of improving the quality of policies and institutions in order to improve on the CPIA.
“A high Country Policy and Institutional Assessment rating will enable the country to mitigate from the current medium rating in terms of policy and institutions to a strong rating,” Mr Yamba said.
The upgrade in the CPIA rating would entail an improvement in the debt carrying capacity of?the country as the debt sustainability indicators would be assessed using higher and favourable benchmarks.
The report recommended that the borrowed resources should continue to be utilised in sectors that are critical to the growth of the economy to ensure increased capacity to carry debt.
It added that continued evaluation of new borrowing on employment and growth, remained key factors to sustained economic growth.
“There is need to accord high priority to the effective implementation of projects financed from the proceeds of the bond issuances so as to ensure value for money,” he said.
To this end, the Government had instituted regular monitoring of the impact of the new public investments on employment and growth.?He said in order to maintain growth and ensure fiscal sustainability, the Government would continue to strengthen and implement prudent financial management and accountability of public resources.
“We have embarked on measures such as fiscal consolidation that include reducing expenditure in non-priority areas,” he said.
Zambia undertook a Debt Sustainability Analysis in collaboration with the Macro-economic and Financial Management Institute of Eastern and Southern Africa from June 13 -26 June 2014.?The objective of the Analysis was to assess the sustainability of Zambia’s current level of debt and the prospective new borrowing requirement in the medium to long term.