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By Mupishi Jones
You cannot use the same thinking that you used to create a problem to solve the same problem.
Doing the same thing over and over again and yet expecting different results is the most clear way of defining madness.No wonder CK once confessed before going back to PF, that he should be considered mad once he rejoins PF and his behavior in PF is proving him right anyway!
The PF have created a catastrophic debt crisis of unimaginable proportion for this country,it’s people together with it’s future generations.Based on unsound economic judgements, the PF embarked on an unprecedented spree of debt contraction from expensive sources despite the public protestations.Devoid of sound economic insights, the PF applied almost all that borrowed money on consumption activities instead of on investment ventures.
The same PF’s reasoning that led this country into debt crisis, apparently is the same reasoning that the PF wants to apply to the civil servants.In my view, the best approach to cushion the civil servants would have been to raise the tax exempt probably to K6,000, unlike making promises of taking up the loans when the PF government itself is debt ridden and broke! The PF must be truthful, when one is failing to pay debt when it falls due,it means he’s broke, the PF is broke and it’s just politicking, period!!!
I know many Zambians are not yet aware about that real impact of what the PF have done to them by contracting such huge and unsustainable debt.Most Zambians have not yet started connecting their current economic hardships to this recklessly borrowed debt.However,Zambians will start experiencing the severe economic impact of this debt stress effective next year when the government is expected to repay the principal amount of US$750m of the first eurobond loan as a single bullet payment.The first eurobond loan is maturing in 2022.The next eurobond loan of US$1.02b is equally maturing in 2023/2024. There’s also another US$1.2b maturing after the second one! Besides these eurobond loans, the PF government has also contracted huge loans from other sources such as the Chinese.The PF government has almost K53 billion owed to suppliers, contractors including terminal benefit to retirees.Amidst all this debt, this is the government that is promising on a campaign platform,to take up another debt of civil servants?To know the extent of this debt repayment challenge, Zambians must ask themselves a question such as, if the PF government has been defaulting to pay interest amouting to US$43m only on the above principal amount, how then is it going to manage to remit just the US$750m first eurobond loan as a single instalment?
Knowing the arrogance of the PF,it may choose to default this principal even if it is fully aware of the consequences of defaulting loan principal amounts.It is the consequences of this possible default that is likely to tickle a catastrophe in the households of many Zambians including the PF themselves!
Countrymen, Zambia has gone back to those old days when it was heavily indebted.What makes the current situation even more precarious is not only the volume of the debt stock,but also the conditions attached to most of this debt.The previous debt contracted by UNIP and MMD was from the multilateral institutions such as the IMF and the World Bank during those Paris Club meetings.Unfortunately, the current stock pile of debt contracted by the PF just within 10 years is from expensive open markets with gruesome and pernicious conditions.IMF and the World Bank had strict conditions attached to their loans unlike the open market.For example, if the government applies for a loan from the World Bank or IMF to provide water to it’s rural communities, the World Bank will fund directly to the contractor and not the government.
The reason why the PF government was going after the open market such as eurobond loans is because the conditions are flexible on change of usage of the loan.What attracted the PF government is the fact that it was able to switch the initial purpose from applying that loan for example, from recapitalizing ZESCO or Zambia Railways to procuring of fire engines without the providers of this loan holding them accountable! Therefore,it was this flexibility that was incentivising the PF government in contracting these loans from high interest rate sources.This same loan flexibility is what has led the PF government to be riddled with numerous scandals especially in the procurement of infrastructure and other capital goods.
Zambians must remember that not long ago, the whole country joined hands with the Catholic Church taking up the leading role in pleading for debt cancellation after MMD came into office in the early 90s.Most of this debt was cancelled because we were dealing with the World Bank and IMF and not individuals on the open market as the case is today! Expecting the private sector to cancel your debt is the same as expecting a supplier of stationery from SOWETO market to cancel the debt which the Zambian government owes him, almost impossible!
Coming back to the US$750m elephant in the room to be paid next year, the government would be compelled to raise money to pay for it.Therefore, to raise this kind of money at once, the PF government would have to mop up all available resources at it’s disposal.This means the budgetary allocations for discretionary expenditures will be the first casualty.Allocations such as operational grants to all grant aided institutions such as health, education, public universities, local Councils must brace themselves to be going long months without receiving any grants! More taxes will have to be introduced, already the withholding tax on rental income from landlords has already been concluded pending elections.
This debt will cripple the normal operations of the government and public discourse on this debt,will take center stage.This will trigger price rise.Inflation will go beyond the roof.Exchange rate will exponentially continue going up making imported goods expensive for consumers.Traders will be compelled to downsize their orders.This will lead to shortages of commodities in most of the outlets.This will culminate into political outcry through citizen protests.This will be a time when Zambians will realize the major reason why the PF government procured those heavy military and riot gear equipment for the police.Zambians will also realize why the PF government has been militarizing it’s cadres!
I repeat, Zambians must stop the PF on the 12 August elections this year for their own sake!
*Mupishi Jones*
Presidential Campaign Team/ Vice Provincial Youth Treasurer