Restructuring debt

THE future servicing of external and domestic debts has become a huge undertaking, having crimped our ability to even fund operational expenditures. The reason for this concern is not just because of the enormity of the task, as shown below, but also because the IMF, which continues to consider our debt sustainable, says in its report on the first review that “The overall risk of sovereign stress is high, reflecting a high level of vulnerability from elevated debt and gross financing needs and low reserve buffers”. There is nothing wrong with borrowing. It creates opportunities for a more productive economy. The issue in our case has been the funding of wasteful expenditures and low priority, poorly designed projects. The result is that gross public debt today at 82 per cent of GDP is 667pc of revenues against an average of 214pc for more than a dozen comparators, while the external debt is 328pc of exports of goods and services as against the average of 64pc for these comparators.