Zambia pushes to remove debt oversight
The proposed constitutional changes come as the government has increased public debt.
LUSAKA - Zambia's central bank said yesterday it opposed government moves to remove lawmakers' oversight over acquiring more public debt.
The government proposed constitutional changes in August to remove lawmakers' right to approve new government loans and the ratification of international treaties - triggering an outcry from rights and opposition groups.
The government has said the changes are needed to get loans and treaties through when parliament is in recess.
Opposition politicians have accused president Edgar Lungu of trying to crack down on dissent - a charge dismissed by the government.
The proposed changes come as the government has increased public debt - drawing warnings from the International Monetary Fund.
In its latest report on Zambia, the IMF said public sector indebtedness has continued to increase, with the stock of public and publicly guaranteed (PPG) debt reaching 78% of gross domestic product (GDP) at end 2018 from 65.5% in 2017, two-thirds of which is held by foreign creditors.
‘Unsustainable’
“Directors noted that under current policies public debt is on an unsustainable path, and ongoing financing constraints have started to force the inevitable fiscal adjustment to occur in a disorderly way, with mounting expenditure arrears,” the IMF said last month.
The Fund cautioned that there is a narrow window for tackling fiscal challenges in an orderly and planned manner.
“This would require a large front-loaded and sustained fiscal adjustment centred on stronger control and prioritisation of public investment projects and postponing the contracting of new non-concessional debt, accompanied by enhanced revenue mobilisation and the scaling back of exemptions and tax expenditures, while reducing domestic expenditure arrears,” the IMF said.
The Fund further emphasised that “strong actions would be needed to reduce debt-related vulnerabilities” and called for continued efforts to enhance debt management and transparency.
‘Critical’
"It is our considered view that National Assembly oversight is critical over these important public functions in a democratic dispensation like ours," the Bank of Zambia said in a written submission to parliament.
A parliamentary committee is receiving submissions on the proposed constitutional amendments before presenting a report to the full assembly for debate.
The government requires a two-thirds majority in parliament to pass the amendments. No date has been set for a vote.
The Law Association of Zambia has also taken the matter to the constitutional court seeking to have the draft law withdrawn. Own report and Nampa/Reuters
The government proposed constitutional changes in August to remove lawmakers' right to approve new government loans and the ratification of international treaties - triggering an outcry from rights and opposition groups.
The government has said the changes are needed to get loans and treaties through when parliament is in recess.
Opposition politicians have accused president Edgar Lungu of trying to crack down on dissent - a charge dismissed by the government.
The proposed changes come as the government has increased public debt - drawing warnings from the International Monetary Fund.
In its latest report on Zambia, the IMF said public sector indebtedness has continued to increase, with the stock of public and publicly guaranteed (PPG) debt reaching 78% of gross domestic product (GDP) at end 2018 from 65.5% in 2017, two-thirds of which is held by foreign creditors.
‘Unsustainable’
“Directors noted that under current policies public debt is on an unsustainable path, and ongoing financing constraints have started to force the inevitable fiscal adjustment to occur in a disorderly way, with mounting expenditure arrears,” the IMF said last month.
The Fund cautioned that there is a narrow window for tackling fiscal challenges in an orderly and planned manner.
“This would require a large front-loaded and sustained fiscal adjustment centred on stronger control and prioritisation of public investment projects and postponing the contracting of new non-concessional debt, accompanied by enhanced revenue mobilisation and the scaling back of exemptions and tax expenditures, while reducing domestic expenditure arrears,” the IMF said.
The Fund further emphasised that “strong actions would be needed to reduce debt-related vulnerabilities” and called for continued efforts to enhance debt management and transparency.
‘Critical’
"It is our considered view that National Assembly oversight is critical over these important public functions in a democratic dispensation like ours," the Bank of Zambia said in a written submission to parliament.
A parliamentary committee is receiving submissions on the proposed constitutional amendments before presenting a report to the full assembly for debate.
The government requires a two-thirds majority in parliament to pass the amendments. No date has been set for a vote.
The Law Association of Zambia has also taken the matter to the constitutional court seeking to have the draft law withdrawn. Own report and Nampa/Reuters
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