Access Bank Zambia Limited Managing Director, Lishala Situmbeko, says negotiations with private creditors, once concluded, will assist the country to expand its resource base which has been constrained as a result of servicing debt.
Situmbeko said these negotiations, coupled with broadening the tax base, would expand Zambia’s resource base.
Secretary to the Treasury, Felix Nkulukusa, during a Town Hall Meeting last month indicated that government had scheduled several meetings in September to advance discussions on a comparable debt treatment to private creditors.
Commenting on this development, Situmbeko in an interview with journalists pointed out that these conversations were important and needed to be concluded quickly.
“I look at debt restructuring as a foundation similar to when one builds a house. So, to contextualize, we are still building the foundation of our economy. The US$6.3 billion restructuring agreement is only part of the story. There is a real side of the story that has to be dealt with now, which is that of the private creditors.”
“Government has already commenced work on the conversations with the private creditors and is it important that these are concluded expeditiously for them to have a positive effect on the economy,” he said.
Situmbeko pointed out that debt servicing constrained resources available for development in sectors such as health and education and that is why it is important to broaden the tax base.
He added that this was the way to go as the country was in need of revenue for development.
He, however, acknowledged that broadening the tax base was one of the toughest elements to execute in an economy.
“It is not easy to broaden a tax base as this would entail putting in place, measures that facilitate collection of dues from those in the informal sector with a view to having them contribute to the revenue pool for the country, which is never an easy thing to do, but is the direction we have to go, and we must.
“We really need to double our efforts in that direction. We need to get more individuals, more small and medium businesses to contribute their fair share for the benefit of our country,” Situmbeko said.
He indicated that in broadening the tax base, principles of tax equity must always prevail.
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