Zambia Debt Ratio Soaring as Currency Plunges, World Bank Says
- Weaker currency makes external debt repayments more costly
- Kwacha is the world's worst-performing currency this year
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The collapse of Zambia’s kwacha is wreaking havoc with the government’s debt ratios, according to the World Bank.
Total debt may reach 56 percent of gross domestic product by the end of the year if the currency remains near current levels, Gregory Smith, an economist with the Washington-based lender, said by phone from Lusaka, the capital, on Friday. In June, before the kwacha’s rapid depreciation and the government’s third Eurobond sale, the ratio was about 32.7 percent, according to Finance Minister Alexander Chikwanda.