TAX EXEMPTIONS FOR MULTINATIONAL COMPANIES RESPONSIBLE FOR ZAMBIA’S DEBT CRISIS – DR. MUSUMALI
…says celebrating debt restructuring tantamount to celebrating failure
LUSAKA, Wednesday, June 28, 2023 ( Smart Eagles)
The Socialist Party has debunked the implications of the much talked about deal to restructure $6.3 billion of Zambia’s debt.
Party General secretary Dr Cosmas Musumali said debt restructuring just postpones the problems because the country will still have to pay back the money to its official creditors.
Speaking when he featured on Millennium TV night live programme, Dr Musumali said debt restructuring does not give an advantage on how to deal with the financial markets.
He said what debt restructuring does is that it lowers the country’s credit rating.
“The financial markets know that you have failed to pay, and you are resorting to restructuring which is an emergency measure. Because of that, your grading gets low. Zambia is not going to get a good grading in the financial markets,” he said.
And Dr Musumali has noted that celebrating the debt restructuring deal is tantamount to celebrating failure.
He said had the country not given a lot of privileges to the Multinational Companies through tax exemption, Zambia would not have been talking about failing to pay debt.
He has since stated that he is not impressed with the deal to restructure $6.3 Billion of Zambia’s debt.
He said the UPND Government went into negotiations with the hope of getting a debt write off of $8 billion but only managed to achieve a $6.3 billion restructuring deal out of the $14 billion external debt.
“We are not impressed, that might be a surprise, but from what we know, this Government went into these negotiations with the hope of getting a debt write off of about 8 billion dollars. You go in hopping to have $8 billion written off, out of 14 billion external debt. After negotiations, you come out and say there is no debt write off, what has been achieved is $6 3 billion debt restructuring,”he said.
Dr Musumali has noted that the current Government is not doing any better than the former regime.
He said when people get into power, they forget the basics of how to deal with debt.
“When you restructure debt, it means you have failed. Before we could restructure the debt, it means you have failed. Five six years ago we were warning the PF not to over borrow. Thus Government has started borrowing, so with regards to debt restructuring, we have just postponed the problem,” he said.
On the news that KCM and Mopani are making progress, Dr Musumali has described this as a talk show.
He said the UPND has learnt the art of confusing the masses.
“They have learnt the art of social media. They will try to convince you of something that is not there. Even when they mess up, like they have messed up with this debt restructuring, they will still come to celebrate and say we have done something wonderful. Even with the mines, they are hiding the fact that some of the worst actors in the sector at a global level are getting back into Zambia. They are hiding those facts, that they are giving away the wealth of the country to their friends,” he said.