DOMESTIC DEBT CROWDING OUT SME GROWTH
By Constance Shilengwe
ECONOMIC expert Kelvin Chisanga has warned that Zambia’s growing reliance on domestic borrowing is choking the private sector, especially small and medium enterprises.
Mr. Chisanga says government’s continued issuance of Treasury bills and bonds has made it harder for SMEs to access affordable credit, as commercial banks now prefer investing in safer, high-yielding government securities.
He adds that this trend is pushing up interest rates and creating a liquidity squeeze for the productive private sector.
Mr. Chisanga has urged government to adopt a coherent funding strategy that reduces exposure to domestic debt and rebalances capital access between the public and private sectors.
He further cautioned that a domestic debt default would be far more damaging than the external default recorded last year, warning that it could cripple the banking system and destabilize the economy
Roanfm Newsroom
Ba Chisanga read multilateral reports critical of government and see the issues why Money supply, interest rates are used as Monetary policy tools to attain fiscal stablity.
SMEs Cooperatives have been offered other means of finance other than the traditional means of capitalising “one’s” business i this adminostration and the past. Access to these avenues have been made transparent in this administration so that the prejudices can be address and the bias reported.
Zambians also need to develop a reading culture. People have a narrow view of issue because their base their opinions based on the little they know and read about. Read widely. The world wide web has brought knowledge closer.