Zambia’s budget deficit will destabilize the economy-World Bank

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The World Bank says Zambia’s current budget deficit of 6 percent will destabilize the economy if not addressed urgently.

Out-going World Bank Country Director, Kundhavi Kadiresan says the budget deficit poses a risk to macroeconomic stability and growth of the economy.

 

Mrs. Kadiresan says government needs strong fiscal policy to support growth going forward.

She was speaking in Lusaka on Wednesday during the launch of the fifth Zambia economic brief on “making mining work for Zambia.”

She says the Zambian government spends more on salaries as a share of the Gross Domestic Product-GDP compared to 30 percent of other countries in the world.

 

Mrs. Kadiresan says there is need to contain spending on salaries and subsidies in order to create fiscal space.

And Finance Minister, Alexander Chikwanda however says government’s current debt portfolio is sustainable.

Mr Chikwanda also noted that government is committed to paying back it’s external debts.

 

The Minister is confident that even the inflation rate will not go to a double digit.

Meanwhile, Mines Minister Christopher Yaluma says government is committed to ensuring that Zambians benefit from their rich mineral wealth.

 

He says government is aware of the challenges that Zambians who want to get into mining face.

Mr Yaluma says this is why governments is coming up with policies that will encourage Zambians to venture into mining activities instead of limiting themselves to being employees.

ZNBC

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