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Zambia’s public debt has increased substantially in recent years due to Eurobond issuances. Public debt to Gross Domestic Product (GDP) more than doubled between 2011 and 2015 and was estimated at 50 percent of GDP as at end-2015 (or US$8.7 billion). The main factors behind this increase are the three Eurobonds issued in 2012, 2014 and 2015, altogether amounting to US$3 billion. Domestic debt also increased and accounted for 25 percent of the outstanding debt as at end-2015.

While debt has been increasing and there are substantial risks to the debt portfolio, no formal debt management strategy is in place. The absence of a debt management strategy implies that borrowing decisions, that have potentially a significant impact on the ability of the government to implement its macro-economic plans, are taken without a plan for the preferred debt composition and risk exposure.

Recognizing the need for a formal debt management strategy, the Ministry of Finance in Zambia organised a training to build analytical capacity required to formulate a debt management strategy based on a detailed cost-risk analysis. A training workshop on formulating a medium term debt management strategy took place from 22 February to 2 March 2016 at Twangale Conference Centre in Lusaka. Zambia’s Permanent Secretary (PS) responsible for Budget in the Ministry of Finance, Ms. Pamela Kabamba, officially opened the workshop.

In her remarks, the PS said that technical assistance on formulating a debt strategy was necessitated by the fact that Zambia’s public debt has increased substantially, with significant exposure to adverse movements in interest rates and exchange rates. She noted that the significant depreciation of the Zambian Kwacha between December 2014 and November 2015 demonstrated the vulnerability of government debt to changes in exchange rates. She added that domestic debt is more costly due to high interest rates, which are currently between 27 and 30 percent. In this regard, she observed that the Ministry of Finance is committed to developing a debt management strategy to guide debt management operations going forward. The PS also thanked the World Bank, IMF, MEFMI and UNCTAD for accepting to provide training to Zambian officials on designing a medium debt management strategy.

The training covered diverse topics including Debt data preparation; Setting objectives and scope of debt management; Assessment of the current debt management strategy, including the costs and risk characteristics of existing debt; Assessment of the potential sources of funding; Determining the baseline macroeconomic projections; Assessment of the main structural factors in the economy that may have a bearing on the chosen borrowing strategy; Assessment of the costs and risks of the alternative strategies; Reviewing the implications of the chosen strategy on the fiscal and monetary policy objectives, including the feedback effects; and  MTDS drafting and approval processes.

A total of 25 participants attended the workshop, of which 14 were female, representing 56 percent of the total. Participants included personnel from the departments of Debt, Budget, and Economic Management in the Ministry of Finance; Financial Markets and Economics departments of the Bank of Zambia; Statistics Office and the Zambia Institute for Policy Analysis and Research (ZIPAR).


Six resource persons facilitated the workshop, namely: Lars Jessen, Emre Balibek, and Bolormaa Ganbold (all from the World Bank), Rosmarie Schlup of IMF, Stanislas Nkhata of MEFMI Secretariat and Gabor Piski of UNCTAD.


The main outcome of the training was that participants gained knowledge and practical skills for preparing a debt management strategy using the MTDS Analytical Tool. It is envisaged that the knowledge and skills gained would enable them to design Zambia’s debt management strategy going forward.