Not all debt was bad debt after all
By Dr Lubinda Haabazoka
In Zambia and as human beings in general, we focus mostly on the bad things and neglect good things.
Looking at the composition of our foreign debt, the one I hate most are Eurobonds. When government first issued Eurobonds, the country was full of joy the same way now everyone is clapping for everything without having a critical view.
I remember going to radio Ichengelo explaining to the public what Eurobonds were and their danger and as usual I received a hostile reaction from the then faithful some of whom are currently serving in government. Well if you look at our debt negotiations now, Eurobond holders are now giving us the most headaches and despite paying interest for many years, the principle remains the same.
Yesterday ZESCO revealed that Zambia has achieved an electricity generation surplus of 1,156MW (Megawatts) following the successful commissioning of 4x150MW capacity from the 750MW Kafue Gorge Lower Power Station.
ZESCO Managing Director Eng. Victor Mapani says currently the installed national generation capacity stands at 3,456.8MW against a peak national demand of approximately 2,300MW.
Eng. Mapani told a high-level Panel Discussion at the ongoing Association of Power Utilities of Africa (APUA) meeting in Dakar, Senegal that ZESCO was using internally generated resources to progress the 750MW project, being constructed at a cost of approx.$2.3Billion to completion by November of 2022 at a cost of US $2.3Billion following non-disbursements by the project financiers.
According to Power technology the financing for the Kafue Gorge Lower power station is estimated at $2bn, which includes engineering, procurement and construction costs of $1.58bn, financing costs of $43m, the insurance cost of $100m and capitalised interest of $312m.
The project is being financed by the Zambian Government and foreign financial institutions, including the Exim Bank of China. The government allocated an initial investment of $186m for the project.
Now our external debt in 2021 was estimated in the region of $12.9bn of which at least $1.5bn can be attributed to the kafue lower gorge. Zesco MD has announced that with the completion of this project load shedding in Zambia is no more. His predecessor also made a similar pronouncement just last year.
With a surplus of 1000 MW, we can connect new houses and even survive a minor drought as compared to previous years. With energy supply we can now export power and raise revenue to even pay back some debt. No wonder we even signed a power export agreement with Namibia recently.
So am very sure as we demonise the past, we have to point out some positives. The way we demonise anyone who holds public office has really removed the eagerness of professionals to serve in government. Anyone holding public office is viewed as privileged and corrupt! I know our current youth don’t know this but it’s every government since unip that we have labelled corrupt!
Same even today, we need to critically analyse the goods and bads so that we do justice to ourselves. For example we need to continue building infrastructure because a country is all about infrastructure. Without schools we can’t employ teachers and without roads we can’t transport goods and services.
So let us continue building our nation and also consider alternative sources of project financing.
Those that leave legacy deserve credit and those that are in the process of creating their own legacy need support.
I rest my case