By KENNEDY MUPESENI –

GOVERNMENT has put in place a robust debt sustainability plan to avoid defaulting on the two Eurobonds acquired in the last three years.
The recent report by the Zambia Institute for Policy Analysis and Research (ZIPAR) reviewed that the country risk defaulting if measures are not put in place before the two debts mature in 2022 and 2024 respectively.
Ministry of Finance chief economist William Kabwe, however, said the ministry had made reforms to the debt management system which would help Government prepare for the future.
“We have put measures to address fears of default raised by stakeholders, there is a debt management unity working on that at the ministry,” Mr Kabwe assured.
He said this during a discussion on the report shortly after the official launch on Wednesday.
Most of the proceeds from the US$750 million and US$1 billion Eurobonds, he said had been invested in proctive sectors of the economy.
He said this had given confidence to stakeholders as the projects invested would spur economic activities in Zambia and in the long time offset the impact of local currency volatility.
On fears that Zambia risked plunging itself in a debt trap, Mr Kabwe argued that the country’s Gross Domestic Product (GDP) is more robust compared to previous years.
“The GDP has grown over the years, there is no need to compare with the past, recently our GDP was rebased and it revealed that the economy had grown by more than 25 per cent,” he said.
Government borrowed US$750 million in 2012 and US$1 billion in 2014 from the international financial markets.
Each year, interest payments on existing Eurobonds will gobble up in excess of US$125 million.
Jesuit Centre for Theological Reflection (JCTR) social and economic development programme officer Andrew Simpasa urged Government to be cautious when contracting debt.