MEFMI Provides DSA Technical Support to Zambia Using Virtual Platform

Following a request by the Ministry of Finance of Zambia, MEFMI provided technical assistance on debt sustainability analysis (DSA) to the Government of Zambia, from 8 to 19 June 2020. This was the first country-specific support provided by MEFMI using virtual video conference facilities.  ZOOM video conference has become a handy platform for navigating through travel restrictions caused by the COVID-19 pandemic.

The virtual workshop was officially opened by the Permanent Secretary for Budget and Economic Affairs in the Ministry of Finance, Dr. Emmanuel Mulenga Pamu. In his remarks, Dr. Pamu said that the DSA was particularly important for Zambia, which has been facing economic challenges in recent years, including declining growth, rising inflation, widening budget deficit, depreciation of domestic currency, increasing external debt service and declining international reserves. He pointed out that these developments, combined with the COVID-19 pandemic, have increased Zambia’s debt vulnerabilities. Hence, the DSA was an important input into the government’s economic and debt management decision making process.

The workshop assessed the sustainability of Zambia’s existing debt and envisaged new borrowing, taking into account the impact of the COVID-19 pandemic. The main output of the exercise was a draft DSA report summarising the findings and recommendations of the analysis. These findings and recommendations were presented to senior officials in the Ministry of Finance and Bank of Zambia for consideration. It is expected that the recommendations will help guide the Zambian Government’s borrowing and economic management decisions going forward. In addition, a total of 24 officials from both institutions were trained on the use of the framework used for assessing debt sustainability in Low Income Countries, the revised IMF/WB Debt Sustainability Framework (LIC DSF).

The DSA exercise was facilitated by Messrs Nebson Mupunga, a MEFMI Accredited Fellow from the Reserve Bank of Zimbabwe; Yasin Mayanja and Tawedzerwa Ngundu, Graduate Fellows from the Ministry of Finance, Planning and Economic Development of Uganda and the Reserve Bank of Zimbabwe, respectively; and Ms. Cristina Dimande and Sayed Timuno of the MEFMI Secretariat.

Prepared by Ms. Cristina Dimande