DEBT
By Dr. Fred M’membe
We think it’s mischievous to say all benchmarks have been met when the IMF statement clearly sets out conditions to progress with the disbursement of US$188 million subject to financing assurances from debt restructuring.
How can they say all benchmarks have been met when there are outstanding conditions set out in the IMF statement? How can one be confident of the outcome when there are preconditions that have still not been met?
While we support the speedy conclusion of debt restructuring, we are not confident because the Minister of Finance has made numerous statements and given timelines in which they were expected to conclude the issue – timelines that have come and gone. How can one be confident when they keep changing timelines?
Secondly, the issue of debt restructuring being a panacea for our economic challenges is being amplified.
Over the past two years we have not been servicing our debt, so where have the savings gone? Once debt restructuring is concluded we will have to start paying the currently suspended debt, meaning we will have less money than we have had in the past two years. Will this solve our economic challenges? The answer is a categorical NO.
The real solution lies in formulating an internal system; an economic recovery plan focusing on industrialisation, expanding our existing manufacturing capacities – and introducing new ones – sound agriculture policy, reviewing tax waivers provided to the mining and other sectors, and energy sector reforms, among other things.
What is needed is to adopt a non-favourite child policy; to treat all creditors the same and engage with each credit category on a bilateral basis, in addition to the G20 Common Framework.
Fred M’membe
President of Socialist Party Zambia