Speaking at the UN and World Bank co-organised Ministerial meeting on strengthening Resilience to debt vulnerability in the Least Developed Countries (LDCs), Chiteme said striking the right balance between development financing and containing debt vulnerability needs an international multifaceted framework.
He said such a framework should address the debt vulnerabilities and policy dialogue while taking into account the country specific peculiarities and global perspectives.
He said it was not the fault of African countries that they borrowed but, in some instances, it was due to trade wars between the west and east.
“We have competing priorities in Africa: we need to provide health facilities, safe drinking water, educate our people etc but for us to do this we need financing. We are not borrowing to consume but to invest in our infrastructure and empower our people. We are borrowing to ensure that we have Africa tomorrow that is at the level that is acceptable for our people to live in and have a decent life,” Chiteme said.
He called for sustainable financing for developing countries like Zambia to achieve the objectives set out in the Sustainable Development Goals (SDGs).
Chiteme further said drivers of debt could be attributed to global and country-specific factors.
“Global factors include commodity prices and global interest rates, while country specific factors include inappropriate fiscal regime, low GDP growth, volatile exchange rate, low institutional quality and political instability in some few cases,” Chiteme said. “Output shocks in commodities have adversely affected commodity exports and subsequently reduced revenues; weather related shocks, like drought in Zambia, reduced agriculture output, low hydro-energy output which put pressure on revenues through increased imports and the deficits have been covered by borrowing.”
And development planning permanent secretary Chola Chabala has assured the international community of its commitment to advance human capital development and empowerment of people with economic opportunities through social safety nets, as espoused in the Seventh National Development Plan (7NDP).
Speaking on behalf of Chiteme at the 8th Annual Ministerial Roundtable on Social Safety Nets: Improving economic opportunities and human capital in changing world of work, during the 2019 Spring Meetings of the World Bank and the International Monetary Fund (IMF) in Washington DC USA, Chabala said social safety nets were important to the Zambian Government.
“We appreciate that poverty and vulnerability [do] not only affect the ability to put food on the table but also extend to access to certain essential services and citizens opportunities to be self-sustaining and contribute to economic growth,” he said.
Chabala explained that human capital development was a key catalyst to harnessing demographic dividend.
He emphasised the importance of using social safety nets in advancing economic opportunities.
Chabala expressed concern about the widening gap between the labour market demand and the training.
“We are [churning] out people from training institutions who are not able to fit into industry and that is perpetuating informalisation of the economy. From most experiences in Africa the informal sector is not broadly covered within the formal social protection schemes,” said Chabala on behalf of Chiteme. “People have to informally contribute …the informal contribution mechanism is not as compiling as it would if one was to be covered through statutory obligation through formal sector employment …the more the economy gets informalised, the more you lose out on comprehensively covering people.”