Govt urged to settle K88.6 billion debt owed suppliers to to stimulate economy

The government has been urged to expedite the settlement of debts owed to suppliers of goods and services, which stood at K88.65 billion as of March 2024. This is in order to stimulate the economy.

Andrew Chibuye, PwC Partner and author of a paper titled “The Latest on Zambia’s Debt Restructuring Journey,” emphasized that paying off these arrears would inject much-needed liquidity into the market.

This, he expressed believe, was critical for economic stimulation.

Chibuye stressed the devastating impact delayed payments have had on suppliers, many of whom borrowed to provide goods and services but have faced severe financial challenges due to the prolonged settlement period.

He pointed out that addressing the debt owed to suppliers, which often receives little attention, is essential for economic recovery.

“Quickly dismantling arrears will help stimulate the economy as more liquidity would be available,” he said.

According to the Ministry of Finance and National Planning, the total arrears under the domestic debt dismantling strategy, covering the period from 2024 to 2029, amounted to K88.65 billion as of March 2024.

Finance Minister Situmbeko Musokotwane provided an update in his budget speech, revealing that the stock of outstanding government bills had decreased by 18.3 percent to K79.8 billion as of June 2024, down from K97.7 billion in December 2023.

Musokotwane also expressed confidence that the stock would further reduce by year-end, particularly with efforts to address fuel arrears.

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