Zambia is facing tough questions over its foreign-debt levels from investors who think the real number may be more than double what the government has disclosed.
Lenders including Nomura Holdings Inc. believe the state has not completely come clean on its external debt.
There is a growing concern the southern African nation may be headed for a similar situation to neighboring Mozambique, where hidden debts led to default as the government is seeking to restructure.
Zambia is in somewhat of a serious predicament of having politically connected additional ‘hidden’ loans.
According to Peter Attard Montalto of Nomura International “Zambia is in somewhat of a serious predicament of having politically connected additional ‘hidden’ loans”.
Officially, Zambia’s public debt in August 2017 stood at $ 12.45 billion, or 47% of gross domestic product.
It has been the main stumbling block in securing a $1.3 billion loan from the International Monetary Fund due to doubts about its debt sustainability
According to presidential spokesman Amos Chanda “Zambia will not go to the end of the world to pursue an IMF program, if not, it will continue with its own program, which is already producing results”.
Still, Zambia is devising strategies to generate revenue internally.
That decision has led the tax administration to audit mining companies, hoping to rake in $ 7.9 billion.
Authorities in February increased a liter of fuel to $ 1.41 cents.