The bank said Government should move towards fiscal sustainability by setting accurate economic targets that will be monitored and achieved to enable the country to improve the performance of Balance of Payments (BoPs).
Zambia’s BoP, which is the method countries use to monitor all international monetary transactions at a specific period of time, reduced as evidenced by the widened current account deficit of US$ 383.4 million in 2014 to US$ 945.8 million in 2015.
World Bank economist Zivanemoyo Chinzara said Government needs to exercise fiscal restraint and curtail the growth of external debt.
Mr Chinzara said there is also need to reduce Government expenditure in areas such as fuel subsidies, as this will lessen the need to borrow and slow the increase in the cost of servicing public debt, thereby, relieving pressure on the current account balances.
“The recent deterioration in credit ratings, capital outflows and exchange rate depreciation have highlighted that maintaining fiscal sustainability is crucial for investor confidence.
“To improve the performance of the BoP in 2016, Government needs to gradually move towards fiscal sustainability by setting realistic fiscal targets and ensuring they are followed,” Mr Chinzara told the parliamentary committee on estimates chaired by Bweengwa member of Parliament Highvie Hamududu recently.
He said improved efforts are also needed to ensure that Government spending is more efficient and effective to improve the mobilisation of domestic revenue. – (Daily Mail)
BY KELLY NJOMBO