Borrowing $6 billion in 3 years, yet they talk  a past Mountain of Debt – Amb. Emmanuel Mwamba

Borrowing $6 billion in 3 years, yet they talk about a past Mountain of Debt

…I see an Argentina in Zambia, where a new government is elected to resolve the national debt crisis,but leaves even a bigger debt crisis….

Amb. Emmanuel Mwamba wrote;

Minister of Finance Dr. Situmbeko Musokotwane has recently raised the debt from the IMF Bail-out from $1.3billion to $1.7billion.

Recently, the IMF and Zambia reached a staff-level agreement on economic policies and reforms to conclude the third review of the $1.3billion Extended Credit Facility (ECF).

” IMF Staff also considered the authorities’ request for an augmentation of the IMF’s financial support to Zambia from the approved SDR 978.2 million (about $1.3 billion) to SDR 1,271.66 million (about $1.7 billion).”

Musokotwane has not even bothered to go to Parliament to seek approval of the $400million he has added on the IMF Bail-out, as required by the Constitution.

He found foreign debt at $11.9billion in August 2021, it’s now sitting at $14.7billion!

He found domestic debt at K178billion and it is now at K236billion!

The debt to Oil Marketing Companies (OMCs) was at $400million as at August 2021. It’s now standing at $800million.

The total public debt has risen from $25 billion in August 2021 to $32.5billion in June 2024.

Recently, Musokotwane has put up a begging bowl that he is looking for $900million in loans and grants to support his budget in light of the national food disaster and food insecurity caused by drought.

Yet they caused this disaster by bungling the agriculture sector and by exporting the entire national strategic maize reserves. A drought must never translate into a famine. We had some of the worst drought cases in 2015, 2019 and 2019 but never resulted in famine.

UPND supporters such as my brother Noel Nkhoma, claim that the current debt is clean and low or accumulates zero interest and is obtained from multilateral institutions and is therefore sound debt!

And Hichilema claims officials from the previous should not talk about the new debt as they “put us in this mess”.

Bane, Debt is debt! Old or new, debt is debt. Whether from China or IMF and World Bank, debt is debt!

Because of our past Debt, Zambians are apprehensive about debt. That’s why they ensured that it was enshrined in the amended 2016 Republican Constitution that contraction of any debt requires Parliamentary approval.

Besides, President Hichilema became popular, partly because he scandalised the Patriotic Front’s accumulated debt calling it careless and corrupt.

Upto now Hichilema starts his defence of the current bad economy by stating that the PF “left a mountain of debt!” He even wants a Commission of Inquiry on the PF’s accumulated debt!

Luckily, the PF debt can largely be accounted for as every single loan went to; power stations, dams, airports, schools, colleges, universities, health centres, hospitals, roads, bridges, and communication towers.

Yes the UPND will talk about the $120million allocated to Zambia Railways. That matter was comprehensively dealt with,an audit was done, and suspects were taken to court. Matters remain in court.

But Zambians should remember that in 2008, after successful debt cancellation, Musokotwane found a foreign debt of $500,000. Within 3 years, he racked it up to $2.8billion.

He was borrowing for everything including unnecessary things such as the $53 million mobile hospitals that worked for only one year!

While you curse the previous government, Musokotwane is accumulating a far bigger mountain of debt that the country may not have an opportunity to restructure!

That is why I see an Argentina and in Zambia. Where every new government is elected to resolve the national debt crisis but ends up leaving a far bigger IMF debt crisis!