Former Commerce, Trade and Industry Minister Felix Mutati says the rate at which Zambia is contracting external debt is becoming unsustainable.
Mr Mutati said in an interview that it is worrying that the PF government has doubled the country’s foreign debt stock in the last two years.
He said the accumulation of foreign debt will make it difficult for the country to keep up with repayment schedules.
“There is nothing wrong with borrowing but what is wrong in our case is the manner in which we are contracting these loans. It is clearly becoming unsustainable because most of the projects we are borrowing for are not going to reach completion any time soon, meaning they will not bring immediate economic returns to help us with the debt serving,” Mr Mutati explained.
He added, “My advice to the government is that let them slow down on debt contraction, there is need to do a clear debt sustainability analysis and examine the projects we are borrowing for because we contract these loans.”
“I find it extremely worrying that within two years, the foreign debt stock has jumped twofold in that short space of time,” Mr Mutati said.
He also expressed concern on the fact that Zambia is now bundling new foreign debt on the already existing debt.
“Last year we borrowed quite extensively and we have done the same this year, what we are doing at the moment is just bundling debt which will make it very difficult to clear,” he said.
PF don’t care as they won’t be in power for long. Especially the way Sata is behaving.
I suppose HH will inherit this massive debt.
We have gone Mexico way, where a govt wasted all the moneys and debts went 70 years backwards. We are back in 1980 under KK, treasure bills will come soon, interest rates inflation 120%. We are in Zimbabwe, and those women will laugh at us.
Tiye nazo bwana mukobwa. Yes bwana……
Just have to look for Post Doc now to avoid stress and die with shock.
HH will never win an election do not fool your self kachema
BETTER SATA TO BORROW FOR ROADS AND HOSIPITALS THAN TO LEAVE MONEY FOR CLEVER THIEVES LIKE HH WHO TECHNICALLY STOLE FROM POOR ZAMBIANS BUT LOOKS AS IF HE NEVER STOLE( ie IF HE WILL EVER GET TO STATE HOUSE). THE CHAP IS A SEASONED THIEF. HE HAS SHARES ON MANY COMPANIES WHERE HE SAT AS A LIQUIDATOR. EDUCATED THIEVES. U WENT TO SCHOLL TO GET DEGREES IN ECONOMICS AND STEALING. ATA SEEE!!
ONE WONDERS WHERE OUR MONEY WAS GOING IF PF CAN DO SO MUCH WITHIN TWO YEARS. GO ON PF BORROW AND DEPRIVE THESE THIEVES OF THE LITTLE THEY WANT TO STILL FROM THE POOR ZAMBIANS. MWEFIPUBA MWE ATASEEE. MWANAWASA WAS THE WASTE, HE DID NOTHING TO THIS COUNTRY APART FROM DOING THAT HOSIPITAL ON CREDIT. ATASEEEE. EVEN RB ATLEAST DID SOMETHING TOWARDS THE END FOR FEAR OF STATE. ATA SEEEE.
HIPC is coming back to Zambia, this is the problem of having leaders who are too old (over 70 years) and saved monies for their children and great grand-children through their being in politics or gvnt, don’t expect more good than evil from them as they will not be there to face the consequences of over borrowing.
These leaders are borrowing so as to steal for themselves and their children/relatives. This borrowing MUST be checked. Where is the EURO BOND money? Shared amongest themselves.
Mutati you’re talking to *****ic folks who have failed to invest their own money wisely.Naturally they’ll be even worse with public finances.
Atleast u now know as to who was making MMD fail for the 1st 10yrs
PF is running a govt on borrowed funds, this is called the easy way out. However, people should recall that borrowing allows people or nations to leave on income not yet earned. This put simply for PF dull cadres this implies the next generations income is being spent now or they earnings will be for paying these loans, hence for the to survive they will need to borrow, in other words PF is planning a debt tramp for the next generations to come. What a shame.
Debt at some point can be demeaning. Anyone who can remember HIPC days. Relying on debt has its limits, the burden can be too heavy to bear. At personal level some people attemp sucide. At national level the country looses value in eyes of international institutions, citizens suffer great knock on effects. Listen well to advice about contracting more and more debt.
The country needs to borrow one way or another in order to survive as we do not have sufficient domestic resources to finance our budget. However, wanton, uncontrolled and irresponsible borrowing pushing us back into a debt crisis we had come out of is unforgivable! Do we have planners at all? How do we always find ourselves in such mess?
Walasa feligo,How do you explain external borrowing to do a township road in Chiwempala? No economic benefit or whatsoever but sure opportunism and Political appeasement!
You are very right. Infrastructure is important but not all infrastructure is needed at once.While people in townships need or also deserve good roads ,borrowed money should have focused on critical areas where economic returns are obvious!
We want 50+1 . Sata must go.
I can’t agree with him more than this, this PF government must be kicked out of leadership anytime around we hold elections. This, however, should demonstrate to politicians and news media, like the post-mortem, that we dont need dunderheads to be at the helm of leadership because they would easily lead the nation into disaster very difficult to be redeemed from as we are now!
I understand USA government is highly indebted…!
@ken follower,no the USA is not highly indebted but it’s debt is at $16 trillion,this is 1/10 of USA budget.the debt was mainly for military costs of wars in Iraq and Afghanistan.as such the govt revenue was used mainly in job creation.as of November 2013 the unemployment drop to 7% ,the USA is winding down the 2wars which is gona save $10 trillion in the next 10 yrs and federal revenue is expected to tripple .the goal is to reduce the debt by 2024 and have 10 $ trillion in savings.am not sure on Zambia ‘
playing to the gallery especially after the bufi song by those boys. some one wants to do in 4years what he failed to do under unip and the first 10years of mmd misrule. overzealous characters who thing they can win an election basically on infrastructure development whilst people in home have no food to eat. shame! ask RB he tried it and it failed. we need well thought out and planned development.
Please do remember that RB posted bumper harvests for each of his three years as President. PF found mountains of maize stocks when they came into office. Since 2011 we as a country have never reached such production targets. You may hate RB like Post Newspaper but the statistics speak loudly for him.
Deuteronomy 27
43 The stranger within you shall get up above you very high, and you shall come down very low.
44 He shall loan to you, and you shall not loan to him. He shall be the head, and you shall be the tail.
4. Can someone tell me what this low life creature who masquerades as a newspaper editor got against RB? Today, when all the newspapers around the world are reporting on nothing but NELSON–MADIBA, he has to insult RB!!The only sin RB made in the eyes of Mmembe was to speak about forgiveness and the need to safeguard Mandela’s legacy. Mmembe cannot tell the Zambian people that he knows RB. Why do you think RB has ignored him even when he could have thwarted him like a fly he is?? He is a nonentity whose only legacy he will leave behind is the delay to pay back the billions he owes Zambians. There is no running away from this one. You cannot go on abusing people through your so called newspapers; people who do not have access to media to defend the3mselves. Why are you not in RSA to cover…
Nkongole…..Zambia’s favorite word.These guys are half way into their 5 year rule and have managed to amass so much debt. What will the debt level be when its time to kick these illiterate jack asses out? The next ruling party are going to have a hard time cleaning up this mess. They shouldn’t even bother with a national airline because they will be flying round the world on the famous NKONGOLE and create even more debt. They are supposed to be creating jobs and not debts.
HH start preparing your self for Presidency in 2016, mulamu.
ITS OK IF PARENTS BORROW FOR THE ADVANCEMENT OF THEIR HOUSEHOLD FOR TRANSPORTATION, EDUCATION (UNIVERSITIES), HEALTH (CLINICS) ETC.
THE PROBLEM ARISES WHEN BORROWED MONIES ARE BURIED IN THE GROUND OR BUYING CAMPAIGN BICYCLES INSTEAD OF INVESTING IN VIABLE PROJECTS FOR THE FUTURE.
Luapula, do you agree or not agree that the level of borrowing right now is heading towards un-sustainability? Could you kindly point out ventures that the government has ploughed money in that will give high returns so that these debts can be prudently serviced? That’s were my problem is with most of of you PF supporters. You will qualify this borrowing by pointing out that the money is going towards infrastructure development but when we counter with arguments that all these are consumption-based projects that ANY president can get into but the prudent ones don’t coz of the debt trap, you have no counter-argument. So i really will not be surprised when you offer no answer to my query. For instance, how will that Makasa university help in paying back the loan?
so whats yo point
@Luapula premier
Has the railway system been improved out of Euromillions?
With such kind of thinking,it becomes clear why Luapula is far behind in terms of
defelopment(development)
@ chikubabeniso
USA IS ALREADY DEVELOPED.
PEOPLE THERE LIKE IN SOUTH AFRICA DON’T MOVE WITH SHOE BRUSHES IN POCKETS OF THEIR JACKETS AS THEY WALK ABOUT DIRTY & DUSTY STREETS.
JOB CREATION? HOW DO U CREATE JOBS IN DARKNESS, WHEN LOAD SHEDDING IS THE ORDER OF THE DAY?
DO U KNOW HOW MANY JOBS R BEING CREATED RIGHT NOW 4 OUR CHILDREN AS A RESULT OF INVESTING HEAVILY IN EDUCATION (UNIVERSITIES)- HIGH COLLAR JOBS, IN INFRASTRUCTURE (BUILDING GOODS ROADS, BRIDGES) (LOW COLLAR JOBS), CLINICS FOR THE GOOD HEALTH OF WORKS, SOMETHING PRESIDENT OBAMA IS ABOUT TO EMBARK ON. PLEASE BE REALISTIC.
REFLECT ON MUNKOMBWE’S SPEECH AT KARIBA LAST WEEK! NONE, I REPEAT, NONE OF OUR PAST PRESIDENTS IN 50YEARS, HAS TAKEN THE DEVELOPMENT OF OUR COUNTRY BY THE HORNS OF THE BULL LIKE THIS…
Munkombwe was saying that to help line his stomach and the pocket. Choose another person with high standing in society if you decide to quote someone to enhance your point.
……..INVESTING IN UNIVERSITIES, CLINICS ETC IS FOR THE GOOD OF OUR WORKERS, SOMETHING THAT PRESIDENT USA OBAMA IS ABOUT TO EMBARK ON.
PLEASE BE REALISTIC.
NONE, I REPEAT, NONE OF OUR PAST PRESIDENTS SINCE KK, HAS TAKEN THIS KEEN INTEREST IN THE DEVELOPMENT OF OUR COUNTRY BY THE HORNS OF THE BULL LIKE THIS MADALA!
Anyone who leaves a legacy of wealth is more appreciatef than one who leave a legacy of indebtedness, never mind infrastructure that can crumble due to high debts failing to maintain what was created. Lets focus on buffering the treasury, putting in money for rainy days rather than trusting in debt.
Well said ,Chitalu
KENYA IS HEAVILY INDEBTED.
KENYA LIKE THE UK, DOES NOT HAVE MINERAL RESOURCES BUT THEY BORROWED SO HEAVILY TO INVEST IN HUMAN BRAINS (BUILDING UNIVERSITIES), NO WONDER, WITH SO MANY UNIVERSITY BRAINS, KENYA WILL BE THE FIRST COUNTRY ON EARTH WITH DIGITIZED CURRENCY..NO BANK NOTES, NO COINS IN 2 YEARS TIME.
WITH SO MANY UNIVERSITY BRAINS MY KIDS COULD WORK AS EXPATRIATES WHO WILL REPATRIATE PART OF THEIR SAVINGS TO MOTHER ZAMBIA. NOT FORGETTING THE IMPACT OF A BROADENED BASE OF INCOME TAX LOCALLY.
MY PhD WAS ON BORROWED MONEY. THEY BORROWED AND I HAVE PAID BACK.
WORLD ECONOMIES AND HUMANS WILL ALWAYS DEPEND ON CREDIT CARDS AND WONGA.
ASK ANYONE FROM THE UK OR SOUTH AFRICA.
One can wonder if all what is being said from many advisers and writers messaged do reach the intended persons. It looks like people just waste precious time writing and advising and everything falls in the recycle bin or deaf ears. Fintu mumwene kabili mwipushe???????????
I like the advise it is good for opposition to say where things are going wrong, let govt in power also take hid, Zambia belongs to all Zambians let us care for our nation
That is why Zambians fear debt to start their own business venture bucause they cant run them prudently and profitably to pay back. Let the Government borrow to put up infrastracture and allow the economy to grow and we shall pay back .Who is going to develope this country if we decide to keep the money at BOZ without investing and you expect to deveolp.Borrow now when you still enjoying good will on favourable terms.Revenue collections has improved to some extent we are able to repay in future.You paint pictures as though each family will physically be bound to these debt chain.We should just be mindful of borrowing terms and application of the funds borrowed therefrom.We are a communist state where we fear that the government will run out of funds to buy spare parts for mealie,sbeer sVIV
Mutati , arm chair critic.You were in government and had borrowed.You never advised RB on how to use the funds but you had let him go shopping in Dubai and global trotting. Mwanawasa had left a number of projects which needed immediate attention but you ignored them and carried on politicking until the last minute when you started cramming with all sorts of projects.You could have easily won the election,if you had started out the way PF Have.
This is typical of Zambian politicians. Doing a right job at the wrong time and doing a bad job at the right time.In other words you should have advised your RB when you were in office.You have no credibility to give advice.
RB did better in terms of infrastructure and in a very sustainable manner
@ Copper ya mana badala
Why did he lose the election if he had done better in terms of infrastructure as you put it ? Which infrastructure are you talking about ,any way?
Good observation Mutati. In fact you should have been MMD President and you are Presidential material for the country. What this borrowing will do to the country is it will make it look nice but with lots of debt. It may end up being a kind of depressed country because in the immediate future the loans will have to start to be paid back even when the country cannot really afford. Then will have more of this wage freeze and other freezes. When debt is being taken on one should make sure that they invest into something that will immediately start brining in an income.