LUSAKA (Reuters) – Zambia aims to lower its fiscal deficit and external debt in the coming year after both overshot plans in 2020 due to the coronavirus, Finance Minister Bwalya Ngâ€™andu said in a budget speech on Friday.
Africa’s number two copper producer has had to ask creditors to defer interest payments on three outstanding dollar-denominated bonds amid the crisis, when lockdowns around the world cut demand for raw materials.
Ng’andu said in parliament that Zambia’s fiscal deficit would rise to 11.7% of gross domestic product in 2020, but it would aim to bring this back down to 9.3% in 2021.
He said external debt stood at $11.97 billion at the end of June from $11.48 billion in 2019.
Zambia was already wrestling with rising public debt before the pandemic hit, and has recently engaged the International Monetary Fund to find a way to put its debts back on a sustainable path.
In the speech Ng’andu said the country was aiming for a real growth rate of at least 1.8% in 2021. He said the target for gross international reserves was at least 2.5 months of import cover, with domestic revenue collection targeted at no less than 18% of GDP.
(Reporting by Chris Mfula; Editing by Emma Rumney, Kirsten Donovan)