However, the country is expected to register a surplus in balance of payments (BoPs) of US$486 million on account of Eurobond proceeds and higher copper export earnings.
The debt has increased to US$4.7 billion from US$3.5 billion last year but paid over US$126 million, Finance Minister Alexander Chikwanda said in the budget speech to Parliament on Friday.
“The stock of Government’s external debt as at end-September 2014 was US$4.7 billion. This increase represents an increase of 34 percent from US$3.5 billion as at end 2013.
“The increase in the external debt stock was mainly on account of the US$1 billion Eurobond that was issued in April as part of programmed financing in the 2014 budget,” he said.
Mr Chikwanda, however, said US$126.2 million has been paid to service the debt for the first nine months, reflecting less than three percent of the domestic revenue.
Under domestic debt, Zambia owes almost K22 billion including arrears for the period under review.
“Zambia’s domestic debt including arrears as at end-September 2014 stood at K21.9 billion, representing an increase of 5.6 percent from K19.7 billion as at end-December 2013. The increase was largely on account of programmed financing for the 2014 budget,” he said.
The BoPs, which is the record of all economic transactions between the residents of a country and the rest of the world in a particular period, are projected to increase to over US$140 million in 2014 from US$344.9 million in 2013.
“This surplus is attributed to improvements in both the current and financial accounts. Higher copper export volumes and the receipts of Eurobond proceeds account for the expected improvement,” he said.
Zambia Daily Mail