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The Civil Society for Poverty Reduction (CSPR) has called on government to re-enforce the internal controls for fiscal discipline across the public service following the successful completion of the debt restructuring negotiations with bilateral and private creditors.
CSPR Executive Director, Faides Tembatemba, also called on relevant government institutions and oversight bodies to work at curbing illicit financial flows as they have a huge impact on economic development through financial leakages.
Tembatemba in a statement issued in Lusaka on Monday said the Civil Society will continue to advocate for debt cancellation and economic recovery measures which do not harm the poor and promote inequality and government must do its part.
She said the re-enforcement of internal controls for fiscal discipline should be extended to the state-owned enterprises to curb the mismanagement of public resources.
“CSPR is elated by government’s successful completion of the debt restructuring negotiations with Bilateral and Private Creditors to restructure United States amounting to $6.3 billion,” Tembatemba said.
She said the restructuring comes at a time when Zambia has been dealing with the legacy of years of economic mismanagement, with an especially inefficient public investment drive.
“Growth has been too low to reduce rates of poverty, inequality, and malnutrition that are amongst the highest in the world,” Tembatemba said.
She said the unsustainability of Zambia’s public debt has contributed to significant reduction of social sector spending in the national budget experienced over the last few years.
“Between 2018 and 2021, debt repayments increased from 20percent to 38 percent of the Country’s National Budget, just as the allocation of funds towards the Health Sector declined from 9.5 percent in 2018 to 8 percent in 2022,” Tembatemba said.
She added that this reflects a shrinking fiscal space with lower allocations to other priorities such as Education which dropped from 17.2 percent in 2016 to 12.4percent in 2022.
Tembatemba said the success of the debt restructuring will, therefore, enable increased funding to the social sector which will significantly improve public service provision and will contribute to a positive performance of the local currency.
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