Mwanawasa says debt burden "intolerable"

President Levy Mwanawasa this week described Zambia's debt burden as "intolerable", and was undermining his government's development efforts. "Each year we have to find in excess of US $200 million just to service the debt. This year the figure may exceed US $300 million. Something needs to be done," Mwanawasa reportedly said in a state of the nation address. "Unserviced debt quickly grows with compound interest making it even more difficult to contain. The debt burden is now intolerable," he noted. Zambia qualified for the Highly Indebted Poor Countries (HIPC) initiative in 2000, a World Bank and International Monetary Fund (IMF) -led programme which aims to reduce debt repayments to "sustainable" levels. According to the IMF, without HIPC, Zambia's debt service obligations would have "more than doubled" in 2001 to over US $420 million. But the country's repayments still far outstrip spending on the health sector, in a country in which 86 percent of the population live below the poverty line. Debt campaigners have argued that HIPC relief has delivered too little, too late. Zambia has yet to reach "completion point" at which stage it would be rewarded with the full benefits of HIPC. Even then, according to the lobby group Jubilee+, it would continue to pay "too much in debt service because ... export revenues are lower than the highly optimistic predictions made by the Bank and IMF". Zambia's civil society organisations - while applauding Western creditors for writing off part of the country's borrowings - are convinced that the international community could do more to lift the country out of its debt trap and on to the road to economic recovery. Many are campaigning for a total write-off of the country's US $6.5 billion debt. For more details see: http://www.jubileeplus.org/databank/profiles/zambia.htm IRIN report on HIPC: Full Report