WHAT IS THE REAL CAUSE OF SUCCESSIVE OVER BORROWING BY GOVERNMENTS IN ZAMBIA- Fred M’membe

WHAT IS THE REAL CAUSE OF SUCCESSIVE OVER BORROWING BY GOVERNMENTS IN ZAMBIA

Today, I want to look at why successive Zambian governments have ended up over borrowing beyond their means and leaving their successors in a debt dilemma. We saw the PF on this trajectory, and despite insisting that the debt was sustainable, we ended up in debt default, though partially attributed to economic contraction as a result of  the pandemic.

Sadly, we are seeing the UPND on the same trajectory under the guise of resolving the challenges PF left. Again, history repeating itself, UPND uses concession loans as a guise to borrow, but it amounts to the same thing, a loan is a loan regardless of the interest rate charged. At some point, it has to be repaid. UPND has even gone further and invaded the domestic market through the issuance of government securities, which has crowded out the private sector from accessing affordable credit. So here, the default is probable on both external and domestic debt, presently estimated at $15.5 billion and K250 billion, respectively. PF left these debts at $11.7 billion and K170 billion, respectively.

So does it mean our intelligent presidents, Ministers of Finance and Cabinet, in its entirety, cannot foresee the danger of debt default way ahead of time and take measures to restrain or even bring down the debt? The answer is that they are fully aware.

So the next question is if they are aware, why embark on this reckless borrowing path? The answer is that they do that to preserve their political existence, which culminates in personal benefits.

Our election cycle is 5 years, and every member of Parliament, among which some of them are Cabinet Ministers, have this strong desire to retain their seats, including the President. To achieve this, they have to convince the voters that they brought development and massive support to their respective constituencies and ultimately the country with respect to the president retaining power. If you listen to Parliament radio, the Minister of Infrastructure is mostly on the floor because every MP is asking for a hospital, school, police post, road, stadium, and so on and so forth. This is so as to please the voters in their respective constituencies irrespective of the debt impact on the country. I am told that if you had to cost every capital project each MP is requesting for in Parliament, the figure comes to somewhere around $48 billion. These requests are blind to the fact that, can we afford or not. Resultant effect is debt is contracted to achieve re-election and political preservation.

This political continuity desire drives them into making irrational decisions to prove to the voters that they must be voted back. At this point, future economic sustainability is irrelevant in their judgment, and the single most desire is to bounce back.

This irrational thinking is what has caused debt issues in this country. Debt will be recklessly contracted to hoodwink voters and put up projects, some of which are unnecessary just to win votes. After all, the attitude is one which says if I lose my seat, someone else will clean the mess. A clear example is the two re-issued Eurobonds with maturities in 2031 and 2032. Mr Hakainde Hichilema sees this as not being his problem because assuming he gets second term, he will be out of office by the time the bonds mature and it will be his successor to deal with the repayment. In between, he can retain power and politically exist without worrying about repayment.

So successive governments have fallen into debt to please the voters in their personal pursuit to retain power and enjoy the benefits that holding power brings for personal gain. ITS SELF BEFORE COUNTRY and not the other way round.

My prediction is that we will see more debt being contracted as we head into 2026 elections under the guise of drought, but infact it’s for personal political survival. Social protection programmes will be heavily targeted to please the voters for UPND re-election.

As things stand Mr Hichilema cannot explain what he has done with the $4-6 billion debt he has contracted since his coming to power as their is no visibility of any project worth mentioning, unlike PF though borrowed recklessly, at least we can see the infrastructure
In conclusion, we need a leader who is more concerned about the well-being of his fellow citizens, now and in the future. A leader that will not worry about self-preservation but the well-being of the people. A leader that will make rational decisions within the resources available and not exaggerate his performance through unsustainable borrowing and leave the country in a mess.

This is what SP is offering to this country. COUNTRY BEFORE SELF – a better Zambia with or without us.

Fred M’membe
President of the Socialist Party