UPND Defends Parliamentary Scrutiny On Debt

Bill No.10 has been opposed by civil society and opposition parties on several grounds. However, one of the chief criticisms of the Bill in its current format is that is seeks to do away with the need for government to secure parliamentary approval on the contracting of public debt by government.

The provision has sparked controversy, both for its questioned constitutionality and for the particular threat it could represent given the current state of Zambia’s growing debt burden.

After opposition MPs earlier this week walked out of Parliament in protest at the legislation further efforts are underway to prevent its passage.

Former Commerce Minister Dipak Patel is petitioning the Constitutional Court on the matter and seeking an order that public debt, both local and foreign, that is contracted on behalf of the government must be presented to the National Assembly for prior approval.

Earlier this year Minister of Finance Bwalya Ngandu confirmed that external debt stock continues to rise and now stands at US$11.2 billion. The debt has increased by almost 10% in the past six months, having stood at US$10.2 billion in June 2019 and just US$1.9 billion in 2011.

Domestic arrears stood at K26.2 billion in September 2019 and concern remains regarding Zambia’s high levels of debt, which reached 80% of GDP by the end of 2019 as compared with 35% in 2014.

Organizations such as the African Development Bank have warned that the country is at high risk of debt distress and the Economics Association of Zambia President Lubinda Haabazoka has previously warned that servicing the debt would cost around US$800 million in 2019.