Chikwanda-3

Minister of Finance Alexander Chikwanda has noted that Zambia’s dependence on external aid has reduced considerably to less than five per cent of the country’s budget and insignificant as a percentage of the nation’s Growth Domestic Product (GDP).

Mr Chikwanda says Zambia will increasingly rely on recourse to the global financial markets to fill resource gaps which will be significant as the country’s development momentum gathers space.

He states that the external benefactors now feel that the nation should rely more on external trade and investment as an engine of growth than aid with its obvious limitations and which is a short term expedient.
The minister said this in a statement made available to ZANIS in Lusaka today.

Mr Chikwanda noted that since independence, Zambia has received varying degrees of external assistance to support its development endeavours.

He observed that at the turn of the 21st Century, Zambia had an untenable debt overhang which he said exceeded the national’s GDP by far.

The minister, however, noted that a programme with the International Monitory Fund (IMF) which entailed a lot of sacrifice by the Zambian citizens resulted in the country accumulating special drawing rights which cleared the country’s debt stock with the IMF.

Mr Chikwanda indicated that the international donor community and cooperating partners exercised consideration in favour of Zambia by cancelling substantial portions of the debt owed by Zambia.

He explained that it is this process that triggered the high growth rates which the country has seen in recent years as it freed resources for economic growth through increased spending on economic sectors especially for infrastructural development and programmes in the health and education sectors.

Mr Chikwanda added that the international donor community came to Zambia’s rescue because the country epitomises the spirit of human fellowship.

He said the country remains eternally grateful for the assistance rendered by all cooperating partners and will also remain committed to maintenance of fundamental freedoms and good governance as it is part of its development agenda.

Mr Chikwanda stated that when external donors invoke adherence to good governance in their aid packages, they merely endorse the moral benchmarks which the country has set.

He noted that donor countries have responsibilities and are accountable to their tax payers who do not want to see their hard earned money directed to support countries that perpetrate infringements of human rights.

ZANIS

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53 COMMENTS

    • the western world has run out of money and their citizens while making painful sacrifices can no longer continue to pay for the luxurious lifestyles of African dictators-Obama has reduced funding for hiv treatments started by George bush hence the shortage of arvs and Britain has substancially cut its foreign aaid budget

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  1. And you achieved this in August 2013! Congratulations Mr Chikwanda! You’re one of a kind! Zambia is now a paradise!

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  2. Bwana Chikwanda,being a one eyed man in a region full of blind men feels like a king,huh? What you’re not saying is UK & USA blantly told you they’l reduce foreign aid and you don’t mention Botswana,Angola & Kenya have been having budgets with little foreign aid for decades.

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    • Ba Enka if this is true, we should then give an appléause instead of calling names of those who have done it, this just shows your negative character meaning… you will never appreciate anything good that will ever come out of this Government period.
      If this is the case, i can happily say light at the end of the tunnel may just appear! It is not easy to achieve such in less than 5yrs on the throne, i dare you the opposition to throw a stone……..
      On the other hand things are shapping up even here in Europe, dus this might just mean that we shall witness more development in 2014 in Zambia, i only hope vultures will not disturb the path so that solide concetration is awarded to the most needed developmental goals already set.

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    • Ba cindy“`
      “If this is the case, i can happily say light at the end of the tunnel may just appear!“
      i agree with you some of your point but on the light which you are seeing at the end that long long long tunnel i dont agree with you. Sata came in power with alot of hope for that light to appear immediately,(and true if you go to youtube on most of his(Sata) interviews he really connected with the voters and he had good points),, but all the hope has been dashed!! To me Sata has fallen short on most of his good intention because of the people around him,, especially Fred mmembe.
      So a good move like in this case plus some bad moves (like those engineered bye elections) takes us into the negatives. and thats not inspiring!!

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    • Ba Ndobo,
      True what you have said but can we atleast applaud to some developments aswell? i for one am happy that the west can make cuts on Aid, this makes the lazy governments to get off their B***s and work, i want to read Doctor Moyos book on dead Aid again.Otherwise, we should always hope for that “light at the end of the Tunnel” it will surely one day appear.

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    • Bo cindy
      Good point on cutting off foregn aid and 100% agree,, i dont have to read Dr moyo`s book to understand, i know that from experience…., i have personally also cut off my `foreign` aid to some of brothers, nieces and nephews.. i help them to some level then i expect them to carry themselves forward,,
      I have a nephew i`ve cut off badly, he was very good at school i used send him money and clothes but he went on a rampage impregnating girls and drinking big time… . so i cut him off because my `foreign` aid was making him lazy and stu.pid

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    • @Cindy : What ba Enka is saying isn’t neccesarilly negative.In everything,especially investments,you need to look at the +’s and the negatives in order to come up with an objective strategy.Remember the ’08 financial crisis brought on by blind optimism and carefree naivete?

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    • @Cindy,
      Let’s try and analyse the impact of cutting aid to countries such as “Our Zambia” whose budget balance incorporates aid from the West. If we don’t have aid, we end up borrowing and where does that take us? Under PF we have heard of Direct Foreign Investment “Pledges” exceeding those in the MMD but we are yet to see any of these materialise from “pledges” to “actual” investment. We, as Zambians, have a tendency of thinking “wealth” is readily available when infact not quite so.

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    • @ Mzambia,
      I hear you, though we could give credit in this instance.
      @ Tribal,
      Borrowing is slavery, the earlier we can stand on our two feet the better, i doubt that can ever happen, it doesnt even exist even supper powers borrow but the manner in which we do it is disgusting, on top of that we keep pilling up nkongole without showing any valuable use, otherwise, there is no self pride in borrowing, Zambia will always be “colonised” for we keeping calling on them with open hands, with this kind of weakness they will always be our masters period!

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    • @Cindy i guess the truth hurts.To you i’m just negative but then again,all the positive votes in support of my views speak of how zambians feel.Yes,its positive but its a trend laid out during MMD’s tenure.

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    • Don’t know about the USA and others but the UK has increased aid to Zambia in the last 2-3 years, according to DFID.

      No main political party is campaigning to cut overseas aid, though that is increasingly the UK public’s desire.

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  3. Chikwanda, the rate at which you are borrowing, the country will end up in the same debt trap. You and Kaunda were responsible for the first debt trap… you must thank the previous governments which cleared the debt and the glory you are now enjoying

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    • @Cindy, His proposition is that Chikwanda should stop his irresponsible borrowing before he takes the country back into another debt quagmire after having helped create the first one with Kaunda!

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    • Cindy if you are thinking in Bemba you might not get my proposition… GangHo thanks for helping

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    • I doubt thats what Ba Engineer was proposing thats why he thinks everyone thinks in Bemba just check his response!
      GangHo……. next time let ba Engineer answer for himself, i may grant him some benefit of doubt anyway he has already exposed himself with his tribal sentiments which unfortunately for him is hard to undress.

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    • Along side reducing borrowing from Markets (which have high interest rates), some savings can be made by reducing the over bloated cabinet and allowances given, the big entourages on the foreign trips. How many of the ministers, deputy ministers and perm secs who are in Livingstone over the UNWTO conference on colossal allowances, cut of course out the many unnecessary by-elections. Every little savings helps!

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    • I doubt thats what Ba Engineer was proposing thats why he thinks everyone thinks in Bemba just check his response!
      GangHo……. next time let ba Engineer answer for himself, i may grant him some benefit of doubt, anyway he has already exposed himself with his tribal sentimentswhich unfortunately for him is hard ti shake off. The dude said the same about guy Scott in the article below, check it you will know what i mean.

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  4. The successive Zambian governments have been working hard and well to have this achieved. Congratulations…A new chapter has been opened for our country. People learn to appreciate what our government is doing for us. Lets not be negative, some of you who think that its because donor aid has been cut, its because you have an inferiority complex…This achievement has nothing to do with donors cutting aid. From 2001 and if you noticed government had been reducing its dependency of foreign Aid, though RB restored huge donor aid but the PF have continued from where the Mwanawasa government had left off.Look at the budgets of those years and read the speeches of the Minister’s of finance you will see that…Proudly Zambian

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    • Borrowing is borrowing, whether it be from foreign governments or Capital markets. The government has been forced to go down the capital markets road because foreign governments are not prepared to give us money when the human rights record of the government and any government does not meet the required norms. Zambia may have reduced its dependence on donor aid but whats the record on capital markets dependence?

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    • Spot on!
      What we need now is less politicking and more debate on how best we can move our country forward. Let’s talk business. Let’s have more seminars on interpreneurship and personal development. The private sector is the best engine for economic development!
      Zambians need to move away from the consumer only mentality and become large scale producers and increase exports! We need to promote the “buy Made in Zambia” strategy to drive internal growth among SMEs. We need to have the spirit of mutual support and teamwork like our compatriots do in Zim! We also need to seriously regulate the quality of goods and services we produce if we are to be regionally competitive!

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  5. It is the dependency on a single export (minerals) which needs to stop. How on earth is he going to achieve his plan when there is no money to spend? All the reserve funds has gone into financing Chakoka and on health tourism to India.

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  6. Less dependant on foreign aid and yet we have extended up our credit line…in simple terms…..our credit card? Wait and see how much interest we shall accumulate…! We must prepare our kids……thanks to Miles Sampa and Chikwandanomics. Wabanga ubukali mudala uyo…..no mulilo wakwa lesa walituna kumenso……I guess fat wallet idunku mdala amuti…..look at VJ…kapuli kakwe!

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  7. This sounds like arrogance: if you think by borrowing we are better… then meditate on this “a borrower is slave to the lender” the bible says.

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    • hahaha. Daniel Mwamba wamonekela. So it has been you all along after all “ati Mushota”. I know you and your mother. Its a shame because I thought you came from a good family….hahaha nakuziba!!!!

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    • Mushota,
      Please refrain from abusing other people by using their names? I bet this Daniel Mwamba is someone important, why else would you choose his name?

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  8. Borrower nor lender neither be!
    If you borrow money from a man, you make him your MASTER!
    If you lend money to a man, you make him your ENEMY!
    Think hard about it and you will begin to realise it rings true whichever side of the fence you are looking from. Let’s try and live within our means as money which is borrowed will need to be paid back by future generations and please stop banking on another debt cancellation fit by the now evr so broke western countries. Do not go on a borrowing spree to line your own pockets please we beg you. You are old and will have no use for that money in the graves that we all will be going after are work here on earth is done. Do not steal to enrich your families! Let them work hard for everything they want to achieve when they are still youthful n…

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  9. …our work here on earth is done^

    youthful and useful.

    *** Teach your children to be self sufficient
    *** Do not punish the hardworking people via crippling taxes but give them incentives to create more jobs
    *** Incorporate young people in the government as we are still experiencing short life expectancy meaning that great minds phase out before they have a lasting contribution to our beloved country
    *** Let’s be the first to introduce age limit to when you can and can’t be president our great nation (think hard about it… teachers/doctors/lawyers retire at 50/55 in Zambia in relation probably to LIfe Expectancy

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  10. Rubbish, I hope you are not taking credit for doing nothing? The donors decided it’s high time you grow up and you are saying you are behind the reduction ? Crap!!!

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    • Chakwanda is forgetting that just confessed that he is in a deficit? Maybe because he can’t be given some more cash ?

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  11. Something is WRONG, how many heard WINTER talking about not getting money from Donors who give conditions.

    Anyway in the closing paragraphs, Its seems Chikwanda is contradicting WINTER KABIMBA.

    before i condame or Jump in celebration, let me wait and see

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  12. Debt can degrading, at individual , community and national level. Be wary at all times. And being a beggar all the time when you are able bodyed gows to show that something is wrong with the way you think. It is challenging.

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  13. too much ignorance on this blog. every country borrows . the over boated cabinet is of course a concern but its utter lunacy to think the money saved by having a small cabinet can go a mile in having infrastructure . in finance we say $2million dollars is a lot, but useless when put in infrastructure. this politicking without a bran is taking this country nowhere, you just become more and more bitter as you feed on your poison. take a chill pill and think rationally for once, it will help you.

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  14. its amazing the level of ignorance on the blog. Countrys run with borrowing, yoo cant have significant infrastructure simply by getting the money from the over bloated cabinet which is a concern for many of us. this money on a national development scale is insignificant. in finance we say $2 million dollars is a lot of money but when put in infrastructure it is useless. thinking you can develop without borrowing is total lunacy. for once stop feeding on the poison and have a level head and think rationally. it will help you a lot. take a chill pill.

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  15. shsst! it’s not ignorance but a matter of opinion thru experience. The issue we have in zambia is that a difference in opinion is a seen as lack of education. We may differ in opinion but meet at the final result. What we need to look at is the cost it takes to arrive at the same result using different approaches – it’s called feasibility study. We all know that even developed countries are in debt but theirs is counter balanced in a way they generate income and deal with unemployment woes by creating jobs and keeping the unemployment rate low. Zambia has a population only 14-16 million ca. More should be done to give our people more opportutinities to empower themselves thru paid employment or business. How much arable land do we have in Zambia?

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  16. you need to understand the fundamentsals on which those economies where built and compare that with the time frmae zambia had had independence. right to opinion doe s not mean right to mislead. these mis informed opinions underline why many bblogers keep geting confused. a little schooling goes a long way. developed countries are not keeping there unemplyoment low, the factors of finance have tilted against them. they are strugling to keep it low. mattaer of fact more jobs are beeing created in third world countries than in any developed country. the logic in finance is that there is and will always be a fixed amount of money in circulation at any given time. therefore when one starts to get rich, its automatic that someone somewere is becoming poorer by the day.

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    • @Professolle you need to do a little research. Most developed countries publish monthly statistics on their economic performance. Unemployment is one of the data released. For a start what reliable figures do have for Zambia? Lets go by your assertion that Developing countries are creating jobs faster than the developed world. As a percentage of the potential working ages, how does the unemployment in Zambia compare with the developed countries? With such simple analysis you will see how flawed your argument is. In Zambia, one wonders what the governments definition of “in employment” is. Is it part time, full time or casual work? There’s been a plethora of figures of jobs created which doesnt match PAYE reciepts. Finally, at fifty, we have made very slow progress, compare this to S…

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  17. Read carefully:
    “Mr. Chikwanda says Zambia will increasingly rely on recourse to the global financial markets to fill resource gaps which will be significant as the country’s development momentum gathers space.”
    Does that mean that current administration has decided to in-debit the Nation for generations to come?

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  18. Zambia can survive without aid if the size of the bureaucracy is cut by half or more. The bulk of the money is gobbled up paying a bloated govt work force and the excessive and unreasonable perks they dish to the ministers.

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  19. This is without a doubt positive development. The less dependant we are on foreign aid the better we can plan. Lets give PF a plus on this one…

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  20. Mr Chikwanda is struggling to be objective amidst people who have continuously exhibited total cadre mentality. Just the other day Mr Kabimba was saying the PF government will not take kindly to any donor who attaches their support to governamce issues. Here Mr Chikwanda is clarifying that donors have obligations from where they come to ensure that the money or aid donated does not conflict with the donors’ taxpayers’ expectations in those countries. Taxayers do not want their money to go to oppressive regimes who may use the same aid to fund oppressive activities. Kabimba talks anyhow without weighing the impact of his statements. He thinks as the party in power they can say anything. Zambia is not an island and we should be careful not to antagonise everyone. We need others to survive.

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