Zambia, Africa’s No.2 copper producer is struggling with high debt levels and shrinking foreign currency reserves, and the International Monetary Fund (IMF) has said growth is likely to remain subdued over the medium term.
Lungu said at a media conference that the government is implementing several policy measures to protect the vulnerable and reduce the cost of running the government.
“The medium-term debt strategy has been developed to inform the path for debt sustainability,” Lungu said.
The government has suspended some infrastructure projects and was also curbing travel expenditure of senior officials, Lungu said.
Lungu said the government was also trying to ensure that only genuine employees were on the public sector wage bill.
Zambia has made progress in its energy sector reforms, intended to leave fuel imports to the private sector and to increase electricity tariffs to cover the cost of producing the power, he said.
Lungu said Zambia could generate adequate resources internally to meet its development needs but this was being compromised by low tax compliance levels.
Zambia’s external debt rose to $10.05 billion at the end of 2018, compared with $8.74 billion a year earlier, raising fears that the country is headed for a debt crisis.
Zambia has delayed the receipt of loans totalling $2.6 billion contracted last year in order to rein in its soaring debt.
Zambia will avoid a default and will continue to shun new loans as it reins in lending and expenditure, Finance Minister Bwalya Ng’andu said in August.