Finance Minister Alexander Chikwanda says Zambia is not borrowing enough to meet its developmental targets. Featuring on ZNBC's Sunday Interview programme, Chikwanda, who has come under heavy criticism for committing the country to debt so easily, said despite being entitled to 40% of the Gross Domestic Product Zambia only borrowed up to 14%. "I am not worried (going to HIPC), the entire government we are not worried we are doing the right thing... OUR debt now is not 10% it stands now at 3.1 billion dollars which is 14% of GDP," he said. "Our internal borrowing stands at K17 billion which is again 15% of GDP. The international community, the World Bank and IMF, have got what we call debt sustainability thresholds for developing countries like Zambia is 40%." He said, "So our borrowing is only 14.4% of the budget so we are far below the international agreed upon debt sustainability threshold. For internal borrowing the debt sustainability threshold is 35% of the GDP and our borrowing is at 15% of the GDP which is far below the internal debt sustainability threshold." Chikwanda said government will step up borrowing in the coming years. "... between now and 2016 we are going for more borrowing to bridge the gap occasioned between the internally available revenue and the expenditure sort of target. Our expenditure for 2014 is K43 billion and the internal revenue is K32 billion which leaves us with a deficit of about K11 billion which we must borrow," he said. "Even 14.5 percent is not enough there is space to service the debt both internal and external." Chikwanda said the proposed Industrial Development Corporation would be a re-incarnation of ZIMCO. He said that IDC will be better run drawing from past failures. Chikwanda said the funds to create the IDC will be drawn from the Zambia Privatization Fund . He said it was not created on sentimentality but well thought out. Chikwanda also said he was still sticking to government and would announce when time for him to leave comes.
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