n AfricaGrowth Agenda - Domestic debt in Zambia : evolution and sustainability analysis

Volume 2013, Issue 4
  • ISSN : 1811-5187


In April 2005, Zambia reached the completion point of the enhanced initiative of Highly Indebted Poor Countries (HIPC Initiative). This resulted in more than 80% of Zambia's external debt being forgiven (2000 - US$6.5 billion, 2004 - US$7.1 billion, 2006 - US$0.7 billion). Further, given the prevailing conducive macro-economic environment, domestic borrowing has been on the rise hence threatening its sustainability. Government has in the recent past shifted its financing of deficits from external to domestic sources mostly through Government securities whose demand has increased both from local and foreign investors owing to the stability in the financial markets. Therefore, this study aims to analyse the sustainability of Zambia's domestic debt given the current macro-economic status (Bank of Zambia, 2005, 2009; Muyatwa, 2008).

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