Sri Lanka Mostly Repaying Debt Taken Before 2015: Mangala
Around 70 percent of the debt Sri Lanka is now repaying has been issued before 2015, Finance Minister Mangala Samaraweera said, showing the danger of debt driven economic activity with little private investment.
Samaraweera said in 2017, 75 percent of the foreign debt repaid was for loans taken before 2015, rejecting a charge by ex-President Mahinda Rajapaksa that the current administration had taken large volume of loans.
In 2018 Sri Lanka had to repay 2,845 million dollars in foreign aid, of which 1,789 million or 63 percent was taken before 2015. About 1,056 related to debt issued after 2015.
“This crisis will further worsen next year,” Samaraweera said. “US$ 4,285 million have to be paid in 2019 and of which UD$3,315 or 77% of the repayment are for the debt obtained during the tenure of the Rajapaksa regime.”
“Although this government was destined to shoulder such a heavy debt burden in 2015, it has been able to take steps to implement development activities at a fast pace than that of the Rajapaksa regime thereby assuring more direct benefits to the people,” he said.
The loan burden will continue to be heavy going forward he said.
“Another US$3,768 million will have to be paid as loan installments and the interest in 2020 and of which 77% or US$2,905 million is the debts that were borrowed before 2015,” Samaraweera said.
“Only US$ 863 million have to be paid for the debt that was borrowed after 2015. In 2021, 83% of the foreign debt installments will have to be paid to repay the debt taken before 2015.
Samaraweera said even in 2030, 73 percent of the repayments will be for debt that was take before 2015.
He said 48 percent of the 12 billion dollars of foreign loans taken after 2015 were also used to repay debts before 2015 that came due.
About 6 billion dollars were taken from donor agencies for projects, he said.