The government recently signed two loan agreements with Saudi Arabia worth $40m to buy urea fertiliser ($20m) and renovate the University Teaching Hospital ($20m). This is the third loan agreement with the Saudi Fund for Development under the Patriotic Front government.
Zambia has witnessed unprecedented speed of borrowing over the last two years. Since PF came to power Zambia's external debt is nearly three times what it was 2 years ago. In 2012 alone, Alexander Chikwanda borrowed a staggering 14 times abroad!
The new budget projects over $1.3bn (K7bn) dollars of external borrowing (foreign finance) - and possibly more given PF's inability to manage public finances, as evidenced by its doubling of the fiscal deficit in 2013 . GDP growth in 2013 is predicted to decline by 1.3% further reducing the debt sustainability envelope.
Chola Mukanga | Economist
Copyright © Zambian Economist 2013