Former Commerce, Trade and Industry Minister Felix Mutati is worried that the PF Government has continued to accumulate huge foreign and domestic debt.
Mr Mutati said the high level of borrowing by the PF government has the potential to threaten Zambia’s macroeconomic position.
Mr. Mutati who is also Lunte MMD MP said the debt accumulation under the three years of the PF is too huge for a small economy like Zambia’s.
“The foreign debt now stands at US$4.7 billion while domestic debt is now in the region of K21 billion which is almost half of the budget,” Mr Mutati said.
He added, “That level of borrowing threatens stability our macroeconomic position and also threatens our growth prospects including our inflation targets and impacts on cost of doing business in Zambia.”
Finance Minister Alexander Chikwanda announced on Friday during the national budget presentation that Zambia’s external debt currently stands at $4.7 billion while domestic debt is at a staggering K21.9 billion.
There is nothing wrong with debt, I have mortgage debt, credit card, a loan and I am smiling
This will be repaid in no time, Mutati is not the sharpest knife in the Kitchen.
Ignore him
Thanks
Mushota..useless!!!
Purely nothing wrong with debt if its accrued for purposes of increasing wealth through investment. But there is everything wrong when debt is incurred for purely consumption purposes. And Zambia’s widening fiscal deficit is partly due to borrowing to consume. We have to reduce non-capital expenditures in our budget so that we can increase our wealth in the long term.
Okay, this explains why IMF and world bank are giving Mukanga a tough time to approve the funding for the 2015 budget.
For a poor country like Zambia with only extractive industry and agriculture as its only export base, it can not afford to borrow more than half its GDP.
I would be happy, if IMF held on to the money and released the money in bit and bobs to fund specific projects by paying the contractors directly. In this way theft will be avoided by all means.
Useless mushota. How can you say such i doubt you senses you must be mad.
What time is football on Wednesday? We need put it in our work-appointments.
Stop those useless budget discussion, better to discuss how the last year budget was reached so-far this year.
@ Nos, True more important stuff. Lets wait for soccer. am on Gentle Jack again on Wednesday. But wont be insulting anyone. Kekekeke . We have to win
@Cat-Power… hahahaha.. don’t expect Field Ruwe to watch soccer, he enjoys American wrestling, he has T-shirt of is John Cena.
And there lies the problem with our country…they would rather discuss football or what they are eating in Big Brother Africa! !
Gentleman Jack I meant to say
It took Kaunda and UNIP 27 years to accumulate US$7billion debt and we thought it was recklessness, it has taken Sata and PF 3 years to hit US$4.7billion foreign debt. Imagine how indebted Zambia will be if PF are to be granted second term?
@ Zozi A Zozi when was that and how long ago. economically speaking what does that entails to you
The point my friend ZED1 is that PF Government should have developed better economic management systems to avoid relapse into serious debt as its only 9 years ago when Zambia received debt relief. Debt relief should have been a stepping stone to growing the economy and was meant to alleviate hardships, cushion the nation from ripple effects of external debt. Here we are now and where will we be in 2021? get back to G8 and China to seek debt wipe off?
Ths really frightening,
Parliament must wake up & stop ths PF nonsense.
Disgusting Government.!
On debt burden’ I am asking a mere question:
For all what has transpired in Zambia so far after 50 years: Can we endorse the Colonial Civics Text Book of PJ Durant theses that Africans are poor because they are lazy; and because they are lazy, they are poor hence the vicious circle, of debt burden! We have been there before and forgiven.
PJ Durant is right: Fifty years after independence. Anyone with an ideal why there is no Black Middle Class fifty years after independence: we still have all the Indians; Europeans still telling us what to do as if colonialism is live and king?
MUSHOTA you are confused in brain, even if you are PF cadre PLEASE be objective in comments, PF debts will sink this country and it is already eating us up that is why PF gvt is failing to fund hospitals, Councils, schools and imposing wage freeze for two years while cost living is going up everyday. PF is full thieves I agree with NAWAKWI’S in the post today u can not withdraw funding institution and pump all the money in road just because they are stealing using those roads contracts
…does Mutati have a soft heart for the current regime..??..why is he using kid gloves..??…using carefully selected words like….’threaten’…..as if the waters are knee high and yet its already neck high…..and still rising at an alarming rate…..
We are already in a desperate panic mode…….we have already past the ‘threat’ stage, catastrophe is eminent…very little can be done now…we just sit and wait for the rescue team(IMF, World Bank) to arrive of course with a sack full of unbearable/undisirable conditions….
There is nothing wrong but if they didn’t plan for it, they cant account for it, you must be one ignorant person not to question them.
WASHINGTON — As global leaders sounded the alarm about a slowing world economy, a more immediate concern drew the attention of policy makers at the International Monetary Fund’s semiannual meetings last week: inflated asset prices and increasing levels of debt overseas.
Bond markets in the eurozone are booming, debt in China is at historic highs and the United States stock market, even with its sharp fall last week, has been on a tear.
@MUNTU and @Scrutinizerer.
PF is not listening to warnings. We will be able to say, we told you so when financial climate worsens. These Bonds are a nightmare on our economy.
What a tragedy that PF have decided to rape Zambia’s economy through their excessive borrowing.
The PF will not listen because they will not in anyway be affected by these debts they are getting, it is you and your children who will suffer on their behalf!
It is someone else to bear the burben to re-pay the debt,they know that.CLEVER PIPO!!!!
Surely if debts will be invested in productive works to bring profits , then i see no reason not to borrow tell me which country or individual doesnt have debts, including you mr economist in this world nothing works without borrowing
THERE’S NOTHING WRONG WITH DEBT, ESPECIALLY THAT A LARGE CHUNK OF IT GOES TO INFRASTRUCTURE DEVELOPMENT. IN FACT, THEY SHOULD NOW BORROW ABOUT 6BILLION FOR CONSTRUCTING AN HYDRO ELECTRICITY DAM ON LUAPULA RIVER TO SOLVE POWER BLUES ONCE AND FOR ALL. AND USE SOME OF IT TO FURTHER CONSTRUCT RAILWAYS AND ROADS TO CONNECT PROVINCES AND COUNTRIES SUCH AS ANGOLA FOR CHEAPER CRUDE AND REFINED OIL TRANSPORTATION.
Mutati has missed the point of debt sustainability. Our fiscal deficit for 2014 is projected at 5.5 % and that of 2015 at 4.4 % of Gdp. The projected 2015 debt service costs is only 2% of Gdp which is way below a level where debt becomes unsustainable.people critisising on borrowing must first have an idea on the size of our economy to avoid being delusional. Even at a personal level one can not conclude that a monthly salary deduction of say k10,000 is big without assessing the size of the actual monthly salary. A.Chikwanda and PF must be commended for getting an additional $300 million as mine taxes which has led to the reduction of our fiscal deficit from 5.5 % in 2014 to 4.4 % in 2015. The new tax regime on mines will give us more tax revenues whenever copper price or output picks
Zebron: your analysis is not adding up. Zambians fiscal deficit is 5.5 % & projected to be 5.8% of GDP in 2015. You are saying fiscal deficit has reduced in 2015 to 4.4% when we have not even started the 2015 Budget cycle. GRZ under PF has channelled a lot of money into infrastructure I.e roads. Massive borrowing to keep pace with infrastructure projects has led to expansionary fiscal policy; meaning deficit is increasing rather than reducing, that’s why Fitch has projected 5.8% for 2015.
Now the rate at which we are incurring debt is far to high than the GDP or economic growth rate. So increasing debt stock is creating Budgetary pressures leading to under funding of critical sectors of health and education and increasing budget deficit. So in this sense debt is becoming…