Zambia's domestic debt increases 18 percent in 2005

Zambia's total domestic debt increased 18 percent in 2005 from 5,246.4 billion kwacha (1.59 billion U.S. dollars) in 2004 to 6,189.4 billion kwacha (1.88 billion dollars).

The debt in 2005 accounted for 19 percent of the country's gross domestic product (GDP) compared with 20.2 percent in 2004, according to 2005 economic report from the Finance Ministry available on Wednesday.

The increase in debt was on account of an expansion in the stock of the government securities, the Bank of Zambia kwacha bridge loan to the government, awards and compensations, said the report.

The stock of the government securities increased by 28.5 percent to 3,242.9 billion kwacha (983 million dollars) in 2005 from 2,522 .6 billion kwacha (764 million dollars) in 2004.

However, the report said that the overall external debt stock reduced by 36.1 percent in 2005 to 4.5 million dollars compared with 7.1 billion dollars at the end of 2004.

The reduction is largely due to the cancellation of debt by most members of Paris Club following the Zambia's ascension to the Highly Indebted Poor Countries (HIPC) completion point and significant repayments to the International Monetary Fund.

The government recorded in 2005 an over budget deficit of over 1 billion kwacha (300,000 dollars) , representing 3.4 percent of the country's GDP.

Source: Xinhua