Zambia’s 18 billion-kwacha borrowing threatens private credit
By the AFREEQUE newsroom, based on News Diggers
Zambia plans to borrow an additional 18 billion kwachas on the domestic market to finance a 19.9 billion-kwacha supplementary budget. Economist Bright Chizonde says the move could raise interest rates and reduce private companies’ access to credit, News Diggers reported.
The Zambian government plans to borrow an additional 18 billion kwachas on the domestic market to finance a 19.9 billion-kwacha supplementary budget, an operation that risks making credit to private companies more expensive, economist Bright Chizonde warned on Tuesday, according to News Diggers.
By seeking funding from the same financial institutions as businesses, the state could increase borrowing costs and discourage private investment, according to Bright Chizonde. He said that this competition would complicate the Bank of Zambia’s efforts to reduce interest rates and make loans more accessible.
