Zambian President Edgar Lungu said that his country is committed to ensuring proper debt management to sustainable levels through austerity measures. Though rich in minerals, particularly copper, for which the country ranks second among African countries, of late, it is struggling with high debt levels and shrinking foreign currency reserves. According to the International Monetary Fund (IMF) Zambia’s growth is likely to remain subdued over the medium term. President spelt out several policy measures to reduce the fiscal profligacy such as suspension of some infrastructure projects and curbs on travel expenditure of senior government officials. The Government is also monitoring the employees on the rolls of public sector undertakings to weed out fictitious names so as to reduce the wage bill.
Hitting hard on the people who are evading tax, Lungu said strict actions would be taken against those who are not complying with tax laws of the country. Recently, Zambian government has taken some tough stands against some foreign companies allegedly for evading taxes and violating environment rules and regulations. Those booked under the law included Indian based Vedanta group, which is based in the UK.
President said that Zambia could generate adequate resources internally to meet its development needs but this was being compromised by low tax compliance levels. Zambia has made progress in its energy sector reforms, intended to leave fuel imports to the private sector and to increase electricity tariffs to cover the cost of producing the power, he said. Zambia’s external debt rose to US$10.05 billion at the end of 2018, compared with US$8.74 billion a year earlier, raising fears that the country is headed for a debt crisis. Zambia has delayed the receipt of loans totalling US $2.6 billion contracted last year in order to rein in its soaring debt. The government said that it will avoid a default and will continue to shun new loans as it reins in lending and expenditure.
