Africa-Press – Zambia. ECONOMIC expert Kelvin Chisanga has warned that Zambia’s growing reliance on domestic borrowing is choking the private sector, especially small and medium enterprises.
Mr. Chisanga says government’s continued issuance of Treasury bills and bonds has made it harder for SMEs to access affordable credit, as commercial banks now prefer investing in safer, high-yielding government securities.
He adds that this trend is pushing up interest rates and creating a liquidity squeeze for the productive private sector.
Mr. Chisanga has urged government to adopt a coherent funding strategy that reduces exposure to domestic debt and rebalances capital access between the public and private sectors.
He further cautioned that a domestic debt default would be far more damaging than the external default recorded last year, warning that it could cripple the banking system and destabilize the economy
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