…debt now K7.9 trillion
The debt is expected to shoot by another K1.3 trillion as the national budget has a deficit estimated at K1.32 trillion, which is 8.7 percent of GDP, and this deficit will be financed through foreign borrowing amounting to K288.78 billion and domestic borrowing amounting to K1.19trillion.
Presenting his 2023 national budget Finance Minister Sosten Gwengwe revealed that for the first-time domestic debt has surpassed external debt, meaning government has borrowed heavily on the local market.“As at end- December 2022, Total Public Debt reached K7.90 trillion or 69.93 percent of GDP. Out of this stock, K4.43 trillion is domestic debt while K3.47 trillion is external debt,” said Gwengwe.
The Minister said debt has increased above 23.8 percent in one year due to government borrowing to finance budget deficits.“Compared to end-March 2022, total Public Debt Stock amounted to K6.38 trillion, representing an increase of 23.8 percent; mostly out of issuance of treasury securities to finance budget deficits and refinancing of old maturing debt the pace of borrowing that I have just cited is unsustainable and needs to be curtailed,” said Gwengwe.
He said government was continuing with debt restructuring strategy through fiscal consolidation and debt treatment.“On debt restructuring, the Government already engaged its external commercial creditors and is now engaging its bilateral creditors notably China and India for a possible debt treatment.