UPND spokesperson Charles Kakoma has implored President Edgar Lungu to provide leadership at this critical time as the country is going through very difficult times precipitated by government’s failure to pay a $42.5 million coupon on Eurobonds on November 13, 2020.
In a statement yesterday, Kakoma lamented that at a time the Head of State is expected to inspire the country by coming up with a credible financial recovery plan following the crippling debt situation, President Lungu was instead busy campaigning for his re-election in the 2021.
“Last week, Mr Lungu was in Eastern Province for a six-day tour to mobilise support for his re-election while the creditors, especially bondholders were expectant of a credible recovery plan from his administration for the management of the crippling debt,” Kakoma said.
He further said while Vice-President Inonge Wina was assuring but misleading Parliament on November 13 that Zambia would not default on its sovereign debt, her boss (Lungu) was busy campaigning for his party and himself in Central Province.
“Perhaps, the question that begs answers remains whether Mr Lungu and his government are keen to address the debt problem. It seems their priority for now is self-preservation; retaining power at any cost as the country’s economy is crumbling without recourse,” he said.
Kakoma said the Patriotic Front government knew that the International Monetary Fund (IMF) had a programme that could offer relief to Zambia’s situation but government was reluctant to meaningfully engage the Fund due to its requisite demands on accountability, openness and good governance.
However, Kakoma said he firmly believes the IMF programme could earn the country credibility and credit worthiness again, which had waned over the past weeks as bondholders were considering Zambia’s proposal to get a six months interest repayment holiday on the Eurobonds.
“The country is bleeding and Mr Lungu and his friends in the Patriotic Front should stop massaging their egos and instead confront the issues concerning the debt. The surge in defaults, like the country has done on other commercial lenders, could lead to challenges in coming up with loan repayment restructuring efforts. The majority of our people, who everyday pay taxes and work hard to feed their families, will be hit the hardest due to arrogance and lack of leadership exhibited by the Patriotic Front. This is not a partisan issue but a national challenge that requires level headedness and honesty in addressing it,” Kakoma said.
He recalled that last week, Hakainde Hichilema advised the government on practical and unambiguous measures that should be considered to help the country retain some credibility with the financial markets.
The measures advised included transparency about the country’s total exposure to debt, scaling up engagement with all creditors, especially the bondholders who feel that the level of engagement has so far fallen short of their expectations and the revision of the 2021 budget, which is heavily dependent on external support.
Kakoma said the debt crisis facing the country should be treated with a lot of urgency and the seriousness it deserves before the country degenerates further.
“We also demand that finance minister Dr Bwalya Ng’andu should give a clear picture on the status of the sinking fund, which would ordinarily be used to pay off creditors. On November 18, the finance minister told the country that he had no idea how much had accumulated in the sinking fund and yet there were previous reports by the previous finance minister Margaret Mwanakatwe that there was $10 million and K636 million in the account since the establishment of the fund under Statutory Instrument No. 75 of 2018,” Kakoma said.
He said for Dr Ng’andu to say he does not know how much is in the sinking fund when the fund specifically provides for cash from the country’s mineral wealth to be deposited in the Sinking Fund to pay components of Eurobonds is mind boggling and frightening about the kind of leadership the country has.
Kakoma regretted that what was happening in Zambia does not inspire confidence but was hopeful that citizens could mitigate the negative impact of the country’s failure to repay the loans “recklessly contracted” by the Patriotic Front government.
“The Church, political players, civil society organisations and other stakeholders should come around the table to chart the forward in the best interest of the country. If we don’t take urgent remedial steps, the lenders may be forced to take legal options, which will further damage the country’s standing, considering that we are already graded as junk status by international rating agencies,” he said.
Kakoma warned that the country’s failure to provide a sustainable and achievable recovery plan would lead to increase in interest rates, leading to less money towards provision of critical social services such as health, education and agriculture.
“Mr Lungu, for once shelves your campaigns for next year’s elections so that together we can discuss and find solutions on how to deal with the elephant in the house. We, in the UPND believe that Zambia is greater than all of us and we commit ourselves to a better and prosperous Zambia. Let’s engage,” said Kakoma.