Balancing Priorities: Navigating Debt Expenditure and Social Sector Needs in the Face of Crisis

Urgent Need to Have a Balanced Approach to Debt Expenditure and Social Sector Spending

Zambia is grappling with debt distress, a significant challenge that continues to shape its socio-economic landscape. The repercussions of this crisis are profound, affecting the government's ability to meet its obligations while simultaneously addressing the urgent needs of its population. It is against this backdrop that there is urgent need to have a balanced approach to debt expenditure and social sector spending during this challenging period and crisis. In response to the challenges and crisis, the Zambian government has initiated a reform program supported by the International Monetary Fund (IMF). A central objective of this program is to gradually increase the level and improve the quality of social spending, with a focus on reducing poverty and inequality. This strategy aims to enhance access to basic public services, particularly in rural areas, where the need is most acute.

Given these developments, the Friedrich-Ebert-Stiftung (FES Zambia) the Jesuit Centre for Theological Reflection (JCTR), the Consortium for the Rights and Welfare of Older Persons (CROP) the Civil Society for Poverty Reduction (CSPR) and the Zambia Congress of Trade Unions (ZCTU) will convene the Social Policy Forum to discuss the complexities of balancing debt expenditure with the urgent and growing demands of social sector spending. Further, to explore sustainable pathways for navigating these intertwined challenges in Zambia's journey toward socio- economic stability and growth.

Purpose of the activity:
• To explore how debt restructuring and servicing affect the allocation of resources to essential social services like health, education, and social protection, and identify ways to mitigate negative impacts.
• To discuss strategies to enhance and sustain social spending despite fiscal limitations, with a focus on leveraging external support, prioritizing vulnerable populations, and exploring innovative financing options.
• To Develop policy recommendations to improve budget responsiveness to crises such as droughts, ensuring that essential social sector needs are met without compromising debt management obligations.