Zambia, which the International Monetary Fund has warned is at high risk of debt distress, contracted an additional $2.6 billion of new external loans last year, according to the Finance Ministry.
If the funds are disbursed, they’ll increase the southern African nation’s external debt to $12.7 billion, from $10.1 billion at the end of 2018. The new loans suggest the government is too complacent about rapidly increasing debt risks, Gregory Smith, fixed-income analyst at Renaissance Capital in London, said by email Thursday.
“Last year, the government pledged it would be canceling loans and slowing down the accumulation of debt,” he said. “Adding more new loans is only going to aggravate what is already a dire situation.”
IMF has warned Zambia is already at high risk of debt distress.