Debt Service begins to Impact Government Expenditure
By Amb. Emmanuel Mwamba
Zambia has not been servicing its major debts since December 2020 as part of the G-20 Debt Service Suspension Initiative (DSSI), an Initiative that recognized the fiscal challenges countries were facing after the Pandemic.
Zambia was the first country to suspend its debt service obligations. They are now 38 low-income countries that have since benefitted from the DSSI.
The initiative was for one year to three years.
Further, the IMF provided emergency financing, grants for debt relief, and in April 2021, offered $650 billion to all its members in April 2021, to help meet the long-term global need to supplement the country’s foreign reserves.
Zambia received $1.3 billion in special drawing rights for this purpose.
The Opposition led by President Hakainde Hichilema mocked the Government at the default. An excited narrative they still peddle while reaping its benefits!
Clearly, Hichilema’s government became the biggest beneficiary of the debt service suspension Initiative as it was not paying its obligations since December 2020.
During this period, the Government had a galore of “free money” and could afford to channel such funds to the social sectors and do mass recruitment of teachers and health workers.
As part of the new Debt Restructuring Deal of both China, Paris Club and the Eurobond bondholders, Government has started servicing its debt with an initial bullet payment of $187 million to Eurobond holders besides other service obligations.
The effect on the fiscuss is immediate with open strain. Now salaries are being delayed, retirement of civil servants’ instalment deductions to microfinance institutions are delayed,and arrears are beginning to pile!
The Minister of Finance, Hon. Situmbeko Musokotwane has announced that Government needs about $900million from cooperating partners for the emergency disaster and will cut up to 30% of the budget of Ministries, Provinces, and other spending agencies to channel resources to food security and other measures.
He has also submitted, besides the K178 billion 2024 national budget, a supplementary budget of K41 billion that will largely go to debt service.
It appears, the disaster will be used, to a very large extent as the reason to inflate and expand the budget and its expenditure, and extend the begging bowl to unsuspecting international community.
Remember a drought should never result in a famine. The story of Joseph as described in Genesis 41 is apt in this case.
Joseph organised the storage of all surplus grain during the seven years of good harvests to prepare for the subsequent upcoming seven-year drought.
As at August 2021, the Patriotic Front left 1.5 million metric tonnes in national strategic maize reserves with the Food Reserve Agency (FRA) with another harvest of 3.7 million metric tonnes anticipated in 2021-2022 season.
President Hichilema has always justified the careless decision to export the maize claiming they needed to pay the FISP farmers and create room for the upcoming harvest.
Clearly the debt service will choke and disrupt Government developmental plans.
Mwamba do you expect to service debt without impacting something else, did you learn about opportunity cost
The Solution to Debt (Nkongole) is, don’t get into Debt in the first place, especially if you know you are indisciplined. Even at family level, you only enslave the other family members, including your grand children and great grandchildren. And your Family members’ only memory of you is that you were a “foolish parent”!!!
In typical pfidiot style ati ‘Zambia was the first to suspend debt service’, no no no eBwamba you pfools defaulted not suspended. You can even gloat over shit that you created. uli bwamba bwashani? Are you normal surely to even say what you’re saying. For Afuledi to publish this, we understand he doesn’t use logic from his Brian but from Matako!!!
What kind of person celebrates the troubles he created for his family? You people clearly stole money which you invested in cadres without brains and other toxic ventures. Those that used to display beds spread with bundles of kwachas and burning excessive US dollars after being paid for creating chaos for innocent Zambians. Money which should have benefited the likes of that intelligent young Kalingalinga girl of excellent university entry results who could not get a bursary at UNZA to pursue her studies and committed suicide because funds were diverted to fools and miscellaneous toxic affairs(dangerously infecting young girls with all sorts of STIs including HIV in exchange for outings, range Rovers, Ford Rangers, houses etc).
Emmanuel, you have no conscious.
People keep asking you questions about how FTJ died and you ended up getting a Job from MCS who was a sworn enemy of FTJ, you have never given a satisfactory answer. You celebrate the difficulties your country is going through because you created the problem so that any government that comes in will fail. Well, to tell you the truth, people are very happy with your sworn enemy despite the difficulties, which happens to be a global problem wherever you go.
You are cruel and that was evident by the manner in which you gave criminals access to guns to terrorize anyone who raised a voice about your criminal activities. Don’t remind us about the damage you caused by your cadre legacy that stamped a very negative impact on the youth, many who even abandoned school to go and tantama for junta and funds to coz havoc on the innocent citizenry. Many died at your hands. There was a terrible spell on this country because PF believed in JUJU. Many lost their lives to ritual killings, a thing of the past now. These troubles we are going through are a ripple effect of your careless spending of the borrowed money.
Bane, ikaleni fye! Lekeni umunenu ateke bwino bwino.
You talk about tribalism, look at the composition of PF as a party! Look at what you left at FAZ, even in football sure? We are inter- married and it is painful that the agenda of PF was to dominate all other tribes by segregating against others.
What happens to families?
Look at UKA, people like Saki are just being used. Ba Given lishina fye mukwai.
Nakachinda is just a vuvuzela for PF..
By the way, the PF of then. My sincere apologies to the current PF of MBS.
UKA, the regrouped mafia of this land.
Just support effort yakwa HH if you really care for Zambians.
Filya balemwyeba bambi ATI tufikongolefye kabili tatwakabeko lintu bakalalipila fyabunkalwe, ubutu, bukaitemwe!