Zambia Sees Budget Gap Shrinking Even as It Misses 2018 Target

LUSAKA (Capital Markets in Africa) – Zambia, Africa’s second-largest copper producer, plans to trim its budget-deficit next year even after missing its 2018 target.

The fiscal shortfall will be 7.4 percent of gross domestic product this year compared with a previous estimate of 6.1 percent, Finance Minister Margaret Mwanakatwe said Friday in her first budget speech since she was appointed in February. In 2019 the gap will narrow to 6.5 percent, she said.

The government will spend 86.8 billion kwacha ($7.2 billion) next year, Mwanakatwe said. Zambia targets economic growth of at least 4 percent for 2019, the same as this year’s projections.

“In 2019, we are faced with higher debt obligations as past loans fall due, thereby constraining fiscal space for other expenditures,” she said.

With the country’s external debt standing at 9.4 billion dollars as at end June, the IMF last year classified the country as being at high risk of external debt distress.

The kwacha has fallen 16 percent against the dollar this month, the most among more than 140 currencies tracked by Bloomberg.

Source: Bloomberg Business News