Research institute report warns of growing debt crisis in local authorities, highlights K4. 6 billion financial liabilities

A recent report by the Zambia Institute of Policy Analysis and Research (ZIPAR) has highlighted a sharp rise in the debt levels of local authorities across the country, revealing financial liabilities totaling K4.6 billion as of September 2023.

This marked a 67.9 percent increase from the K2.8 billion reported in June 2020.

The report attributed the rise in debt to weak internal revenue mobilization, poor financial management, and delays in government disbursements.

Minister of Local Government and Rural Development, Garry Nkombo, launched the report on Wednesday at the Radisson Blu Hotel in Lusaka.

Nkombo acknowledged the report’s findings, calling them a crucial reminder of the need for improved financial management within local authorities.

“Rising debt, particularly in pension arrears and unpaid taxes to the Zambia Revenue Authority (ZRA), poses a significant threat to Local Authorities’ financial stability,” Nkombo warned, emphasizing that unchecked debt could severely impact service delivery and stall local development.

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He called for sustainable revenue mobilization strategies and stronger financial management to ensure a more efficient and decentralized governance system.

In response to the findings, Nkombo noted that local authorities were working to automate revenue collection through the Government Service Bus (GSB) and emphasized the importance of aligning resource availability with staff recruitment.

“Citizens must be encouraged to pay for services at designated local authorities offices or through electronic platforms that remit funds directly to council accounts,” he added.

UNICEF Country Representative, Penelope Campbell, echoed these concerns, stressing that the growing debt could prevent local councils from fulfilling their responsibilities, which would ultimately affect essential services to communities.

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