TI-Z PRELIMINARY STATEMENT ON THE SPECIAL AUDIT ON EXTERNAL PUBLIC DEBT
Transparency International Zambia (TI-Z) welcomes the release of the Special Audit Report on External Public Debt of the Republic of Zambia for the period 1st January 2006 to 31st December 2022. The Special Audit of Zambia’s External Debt was long overdue as it has been the subject of civil society advocacy efforts for over a decade. Since the issuance of Zambia’s first Eurobond and the resulting growing evidence of debt unsustainability, there have been calls for the Government to explain how Zambia accumulated such huge debt with no corresponding improvements in standards of living or economic growth. This Special Audit Report therefore provides confirmatory evidence on issues such as the level of external debt unsustainability, which reached the height of 70% of GDP in 2020, while the debt stock to domestic debt ratio reached 170% in 2015. These figures, as well as the failure to finance the Sinking Fund and the inflating of interest and principals on loans, coupled by the mismanagement of the Eurobonds, show that Zambia has been in debt distress for a long time.
TI-Z commends the Office of the Auditor General for finally releasing a comprehensive audit on Zambia’s External Debt. Unlike Annual Audits, Special Audits are responsive to public demands and are topic specific, allowing for more focus and deeper scope. It is for this reason that Article 250 (1)(c) of the Constitution of Zambia (Amendment) Act No. 2 of 2016 provides for undertaking such audits. TI-Z is therefore undertaking a comprehensive analysis of the Special Audit Report and will provide a more comprehensive statement once this analysis is completed.
In the meantime, we would like to caution the public against politicising the report or labelling it a witch-hunt as though it is targeting specific individuals or companies. Although the Audit Report, specifically in the executive summary, has indeed presented outstanding findings citing Mikalile Trading Company, this is certainly not the focus of the entire Report. TI-Z therefore calls upon the media and all interested stakeholders to study the entire report and to consider the critical findings and recommendations aimed at improving debt management in the country.
Maurice. K. Nyambe (Mr.)
EXECUTIVE DIRECTOR