By Jane Chanda
Economics Association of Zambia (EAZ) says the government’s prioritisation of debt restructuring and wage bill over key economic sectors is alarming and will hinder economic growth.
And EAZ says investing in economic growth is crucial, as a robust economy is key to sustainably managing and servicing Zambia’s debt.
Last Sunday, Finance and National Planning minister Dr. Situmbeko Musokotwane disclosed that from the K23.1 billion released for public service delivery, K3.9 billion was channeled towards salaries and K12.7 billion towards debt servicing.
Reacting to the same in a response to a press query from Daily Revelation, EAZ secretary Emmanuel Zulu expressed concern that the current allocation would not stimulate economic growth, stating the importance of balancing fiscal consolidation with service delivery to ensure that the needs of the most vulnerable populations were met.
Asked whether the government’s efforts to diversify its revenue base were sufficient to address the economic challenges, Zulu stated that while the government aimed to create jobs and also dismantle debt, it must carefully balance with fiscal consolidation to ensure service delivery was not compromised.
On the importance of investing in economic growth, Zulu pointed out that a robust economy was essential for sustainably managing and servicing Zambia’s debt.
He also stated that the government should prioritise investing in key economic sectors to stimulate growth and improve the economy.
The EAZ secretary further stated that many experts shared his concerns, arguing that the government’s allocation of funds towards debt servicing and wage bills was unsustainable in the long term.
“The government should channel such huge sums of money to improve key economic sectors in order to better the economy,” stated Zulu.
However, Dr. Musokotwane assured that the government was committed to reducing indebtedness and achieving macroeconomic targets in 2025, specifically aiming to achieve a 6.6percent real GDP growth rate, 6-8 percent inflation and increase domestic revenue to 21.3percent of GDP.
