The respected UK based investigative publication Africa Confidential has claimed that the Zambian government raised the country’s largest pensions fund NAPSA to pay delayed February salaries for civil servants.

In its latest publication, Africa Confidential claims in an article titled Treasury in the red that Zambia’s liquidity problems are getting worse and that state assets are looking more likely as a last repairs to avoid debt default.

It reported, “The lavish spending and borrowing of President Edgar Lungu’s government is starting to catch up with it. Africa Confidential has learned that in March, it had to raid the state pension fund, the National Pension Scheme Authority (NAPSA), to pay overdue February salaries for public service employees.

“While the ruling Patriotic Front continues to deny that its debt burden poses any problem, alarm has been growing in financial circles. Standard Bank, which trades as Stanbic in Zambia and is a significant lender, has warned in a report titled ‘Déjà vu’ that the government is facing an imminent liquidity crisis.”

It added, “Of key concern are the foreign reserves. The government began the year with a little over US$1.5 billion in reserves, only slightly more than the $1.4bn of budgeted debt repayments. Central Bank data shows that last year, it paid almost all its external debt service and some domestic debt from the reserves, totalling almost $1bn.”

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