PRESIDENT HICHILEMA HAS DELIVERED ON PROMISE OF DEBT RE-STRUCTURING – MWEETWA
LUSAKA – JULY 31, 2022
UPND spokesperson Cornelius Mweetwa says President Hakainde Hichilema has delivered on his pre-election pledge of debt re-structuring.
Mr Mweetwa, who is Southern Province minister, updated journalists in Lusaka today on the progress being made on debt re-structuring and Zambia’s nearing attainment of an IMF economic package.
He said President Hichilema came to power mainly on two promises, amongst many.
Mr Mweetwa said those electoral promises are restoration of the rule of law and economic recovery and economic transformation.
He said restoration of rule or law, under the new dawn administration, has resulted into a conducive and peaceful Zambia where business is being conducted to support economic activity.
Mr Mweetwa recalled that on the frontier of economic transformation, President Hichilema anchored his electoral promises on debt re-structuring.
He explained that debt re-structuring sees to it that there is headroom for a better national balance sheet outlook.
“At the time President Hichilema took over in August 2021, Zambia was defaulting on its international and local debt repayment obligations,” Mr Mweetwa said.
“Zambia owes its international debtors about US$19 billion and its local debtors more than US$3 billion. Put together, Zambia’s international and local debt stands at about US$22 billion to US$23 billion.”
Mr Mweetwa added that the implication of Zambia’s indebtedness is that per annum, the country is expected to meet its debt obligations to the tune of K42 billion.
“In dollar terms, Zambia’s obligation to debt repayment per annum is standing at US$2.6 billion. With this kind of choking and unsustainable debt, it was very self-evident that economy would not go anywhere because when you look at Zambia’s debt portfolio, it matches, if not slightly above, Zambia’s GDP (gross domestic product) – which is about US$22 billion,” he explained.
“You cannot borrow more than your asset endowment! But Zambia got to this stage because of recklessness of over-borrowing.”
Mr Mweetwa noted that President Hichilema has walked the talk and has engaged Zambia’s official creditors, thereby making the country’s official creditors to announce finance assurances to Zambia.
“This means that the IMF will get Zambia’s request for an economic bailout to be tabled before the IMF shareholders for approval, to a tune of US$1.4 billion,” Mr Mweetwa said.
“As a party in government, this is a milestone and we take this occasion to thank Zambia’s official creditors for coming to this position of giving finance assurances to Zambia, which has created headroom for Zambia’s economy and financial standing.”
He further indicated that the money which the IMF would give to Zambia, at a remarkably low interest, would be invested in critical sectors like energy, agriculture, education, health.
“These four sectors drive the economic engine of a country,” Mr Mweetwa said.
“The electoral promise that the President made of debt re-structuring, that has been delivered. So, those who are saying nothing is happening in Zambia, that HH is not delivering on his election promises, this is your answer; HH committed to debt re-structuring as the first step towards economic recovery for economic transformation and he has delivered.”
Meanwhile, the minister said figures in opposition political parties who have been lying to the nation that the new dawn government was failing to recruit teachers and health workers because of the non-availability of an IMF bailout should apologise for misinforming the nation.
“If they don’t, citizens should write them off as cheap political propagandists. The present politics does not require propaganda but one to work with facts,” Mr Mweetwa said.
He stressed that Zambia’s economy is now in safe hands, especially that there is no pilferage of public resources.
“President HH has fulfilled his electoral promise of debt re-structuring. So, we ask citizens to go back to their checklist and tick which promise was made and which one has been fulfilled,” said Mr Mweetwa.
(C) THE FALCON