OPPOSITION Members of Parliament (MP) yesterday refused to back a motion by Finance Minister Alexander Chikwanda seeking to increase the threshold of domestic borrowing from K200 million to K13 billion, among other adjustments.
Alliance for Democracy and Development (ADD) Luena Member of Parliament (MP) Mulumeui Imenda said once the threshold for domestic borrowing was increased, the country risked falling into a debt trap.
“I oppose this motion, we are coming from a background when we were heavily indebted whether domestically or internationally and we are now going back to the same situation. This development is bringing shivers,” Ms Imenda said.
She said if the borrowing threshold was increased, it would also trigger a hike in interest rates, apart from suffocating private sector participation in economic affairs as borrowing would be difficult for them.
United Party for National Development (UPND) Monze Central MP Jack Mwiimbu, in opposing the motion, expressed fears that Government would fail to pay back the domestic debt.
Mr Mwiimbu said a similar approval of the threshold for international borrowing last year led to indiscriminate borrowing by the Government.
“Government has been failing to pay contractors and that is why they want to increase the borrowing threshold.
“A number of countries that are in the habit of borrowing are now on their knees, that is where we are heading to,” Mr Mwiimbu said.
Mwandi MMD MP, Michael Kaingu felt that increasing the domestic borrowing threshold would plunge the country into unsustainable debt.
“Excessive borrowing will not benefit the economy and the paradox of heavy borrowing is that it will choke the economy and negatively affect the private sector,” he said.
In presenting the motion, Mr Chikwanda assured the House that the increase in the borrowing threshold was meant to help Government implement various economic projects in view of the Budget deficit.
“Raising the threshold will help Government to implement the various projects. This borrowing will be sustainable, it will not disadvantage the private sector,” he said.
He said Government regarded the private sector as key players in advancing economic growth, adding that borrowing would not be done indiscriminately.
The minister assured the House that Government would endeavour to get loans for the progression of the economy and would ensure it was within sustainable levels.
Mr Chikwanda proposed to increase domestic loans, payable over a period of 10 years, from K200 million to K13 billion.
Others were to raise domestic loans within the Republic, payable over a period of more than one year, from K10 million to K20 billion, as well as the contingent liability of loans and guarantees (Authorisation) Act, to persons ordinarily resident in Zambia, from K2 million to K2 billion.
This is what chi Chikwanda did as Finance minister under UNIP, LEAVING. Debt of 7 billion frm over borrowing. He will leave the same legacy under the panga fo.ols. This gang must be stopped at all costs. He has the same UNIP ideas. Very old and useless.
Chikwanda must retire
Mmd till I die
Hnnnnmnm? Really? Chikwanda was UNIP Finance Minister? Was it after Luke Mwananshiku? If indeed Chikwanda is a UNIP manager, then please let him step-down, before I finish him.
What Chumbu Munshololwa said last week about you all being useless now makes sense.
These DIRTY OLD RUGS are now irritating. Governments world over raise the funds they need from Taxes and avenues other than borrowing. Does Chumbu or Chikwanda (both dirty OLD RUGS) have an idea on what they ought to do.
This is a very worrying development from Chikwanda. Please opposition make sure you block this move as it will lower investor confidence in our economy stemming from the fact the borrowing for individuals and the private sector will become unaffordable as mentioned by Jack Mwimbu at el.
When say Sata and PF have syphoned all the money they borrowed into their personal accounts most of you PF retards go to the hills screaming tribalism and constantly fronting your useless un budgeted construction projects. Sata has allowed Chikwanda to borrow left right and centre but still the money is not enough to pay all the workers and fund the projects he launched on the hoof.
Its now clear that the €750 million bond is already divided up with Sata and Chikwanda getting the largest chunks via…
Chikwanda is still with UNIP mentality. These are the same people, KK,Sata,Munkombwe and many more who led us into severe recession.
The cartel is back together again to squeeze and finish the crumbs of the depreciating Kwacha. If people just watch and look at PF’s over borrowing millions of dollars, by year end, the entire country will be in and suffering from absolute poverty just like before 1991.
The Chikwandas have nothing to lose, our children will be the ones left with PF’s debt and they Pathetic First(PF) will be long gone.
Opposition MPs must wake up and stop this squandering by Panga Family(PF).
This human economics of borrowing will one day kill Zambia, i just wonder if Sata has advisors.
So many Saulosi wanna be`s on LT.Shows how people get intimidated with my posts.Ha ha ha typical of people who can`t sustain a rational debate ,they always resort to diabolical means to cover up their flaws.Keep on doing it,i know it makes you feel better, but in reality it shows how boring the life you lead is.Get a grip on yourself bro there are better things to do in life than name dropping.
senzagakoena,”this is a vicious circle mudli”,borrow to develop the economy and then borrow again to sustain the economy developed so that we have a good credit rating.this looks like white supremacy at work.either way,you just never win fairly.either you lose your resources as they exploit you or they push you into a debt trap or they manipulate your policies in exchange for good economic indicators.awe sure,it will take true character to steer zambia,africa away from such manipulation.it will take a selfless leader,a true son of the soil,one who can stand. but he/she will need to be supported by fellow brothers and sisters (neighbouring countries).dont be like botswana and betray your fellow africans in exchange for good economic indicators.they lend money to IMF instead of neighbours
@saulosi – whoever you are man, just shut up. nabakunyenga mambala iwe!!!!
Clearly irresponsible for the government to borrow so much so soon.
Good to see the opposition are refusing to back this.
It is becoming worrying whatever stone you are standing on really.
Thanks
@Zagaze tiye uko cheek allah.Pan your pa call !
Chikwanda nai mulia AIDS ku bongo bongo!!
But what makes your govt plans or implement developmental projects
without sourcing funds first!
Surely are there still some people in this country who are not part of the corrupt who sincerely believe we have a govt in place. This PF govt does not mean well at all. If someone one an express entry into the poverty realm he/she should go the route of borrowing. Please PF just wait for 2016 and leave the country in one piece so we can ask other able minds to run the country. Chikwanda you have a history of having failed this country and you are at it again, failing this country only enriching your district.
Borrowing is bad our children will suffer in future I hope the people who boma want to borrow money are not like yusuf and irfan
These DIRTY OLD RUGS are now irritating. Governments world over raise the funds they need from Taxes and avenues other the borrowing.
I need all OLD RUGS OUT please.
Chikwanda yesterday said that, the depreciating Kwacha is not a worry. How sick is he?
A finance minister not worrying about the valueless currency is sickening to the country’ business fraternity.
Zambia kaya chambe, kaya!
borrow and it will burrough a grave for future generation.
This man loves kaloba,how does he manage his private affairs? He has been borrowing from day one,to make matters worse his useless MPs will support the crap,You want citizens to be competing with the Govt to borrow sure,this will certainly push interest rates up! Mdala be serious,a country for old men for sure!
Another nail in the economy recovery coffin.
one wonders the economics being used nowadays!
This old man,he is scaring me.
Yes you should. He once failed our economy under UNIP and he never learnt a thing. With all these pronounced projects, he is really stuck. The problem is that he could not advise or the president never listened to his advice.
It is Honourable to Resign and say i have failed, what is wrong Kanshi this Man is too tired and is now making the Technocrats at Finance and BOZ look incompetent. Let him play with his Grand Children not with our Economy.
Not just Chikwanda. Both Chikwanda and Chumbu Munshololwa ought to resign.
This is what happens when you implement each and every project you dream of in your sleep, no plan no budget: new universities, roads everywhere! Now there is no more money to finish off the projects!! budget deficit will be record high, never seen before!!!
And all these unfinished stupid projects are left to ROT, not earning any money for Zambia while our children have to pay off the loans!
Truly useless thinking!
Let me remind Zambians — Nitrogen Chemicals in Kafue, Kapiri Glass, Mansa Batteries, Livingstone Motor Assemblers………….
WE are still paying off the money borrowed by the Dictator KK and his UNIP for those failed ideas.
Now this M0R0N wants to do it AGAIN!
New universities, schools, hospitals, roads, etc. These are good and great projects which every Govt everywhere would like to undertake, But there is need for proper budget allocation! You cannot implement these projects only by command: “let there be new roads, let there be new universities” as if you are quoting the creation story in the book of Genesis!
What new universities? These were already existing as technical colleges (President Citizenship College now Mulungushi Univ, Nkruma Teachers’ college, etc..) just relabelled. And the roads don’t look like they will last one rainy season. So where is all the borrowed money really going??? Ask KK how his parastatals bled the country dry only for the people to be burdened with massive debt. Remember (those who still do) how the Kwacha lost value from K8 to K25 within a few weeks.
Debt and too much of it will make the country untrustworthy. We should learn from coyuntries like UK where the country is trying hard to repay the loan left by previous govt which also over borrowed in the belief that they will do better. Debt makes you a danger to yourself as a nation. Just target raising funds through revenue generation but rather than attracting more debt. Target reducing debt. Appetite for spending never stops, the more you borrow the more you spend on less productive ventures and carelessly, boastifully, arrogantly and sturbonly. But in due course you not even sure of how you going to liquidate that debt. The appetite for ever borrowing is ever big and never stopped because its just instinctive and does not require much reasoning. Reduce govt debt, if you can.
What we have is double tragedy. Too many unplanned projects and hiked salaries of public service workers on one hand and completely inadequate revenue collection strategies. THIS IS AN UNIMAGINABLE INCOMPETENT GOVERNMENT.
I might be talking to students here i guese. Yes you are right, infrustructure mostly is not a revenue centre but a conduit of revenue. One reason diversification has been difficult is because all people are clustred in Lusaka because of lack of infrastructure else were. Agriculture is one of the key areas of diversification but lack of proper roads and infrustructure in rural areas have hindered that. So am not sure how you guys wud transport the farming outputs. Unless you tell me mukalapapa amataba panuma when transporting. Be factual and dnt just politicize good intentions.
I fully support Chikwandas borrowing for infrustructure. Do not be deceived it takes money to make money. Zambias gearing ratio is low at 30%. South Africa is at 40% . Borrowing a bit more is advisable to increase pace and return on economic output. People want fast development via bootstrapping, this is a country not a kantemba.
Zambia’s population and economic capacity is like a province in South Africa, therefore this comparison is a bit odious. What capacity do we have to repay all this reckless borrowing? One way is to flood our country with capacity, aka foreign investors whom you vilify at a whim because they use the same ground you walk on to create what you have failed to. I think we need to look very closely at our capacity and our track record before we start comparing ourselves. Besides, the South African economy at present is led by a vibrant, supported, robust private sector. Zambia? If your private sector entity is not tied to your political party of the day it is useless… so raising threshold in such an environment is inimical to our economic progress.
If you talking of population then you need to go back to school and redo your financial economics. To measure Zambias capacity to repay you have to talk of increased copper export and agriculture including value addition to output. All these things need money. Let me make my question to you simple. If you were minister, what strategy would you use to achieve tangible development in 10 years?
@Kai
You have just given a brilliant analysis here. I hope these PF buffoons will understand your intelligible analysis.
When they are beaten hands down debating real issues, they always find silly excuses which include tribalism, wishful construction projects and comparing apples with oranges like @matrix has just done.
Comparing SA with Zambia is complete madness because SA is far advanced in all sectors such as Mining, Agriculture, Banking, Manufacturing, and the service sector. With South Africa what ever project they want to execute they do it using local industries and therefore ensuring that the money spent on such projects remains within their economy.
Unfortunately for Zambia any tiny high tech project the government implements leads to huge sums of forex going…
@wanzelu, you are indeed waignorance.. you call this political financial economics a brilliant analysis? You need a lot of education, i think taking you back to pre school first then we can pick it up from there
Get real!! Tell me in a few years how much infrastructure has been built. We have been hearing this since the 1990s from Chiluba’s rule. Only real development was during the late L.P. Mwanawasa’s tenure when even the roads were built to last.
People keep on saying infrastructure, am sorry but no one has explained to me how hospitals, universities and new districts will help generate income.@matrix I agree with u on agriculture but u know wat? pf has messed that one up te? And copper exorts??? Really?? Isn’t KCM exporting a alot of copper under our noses? Can u trust an incompetent govt to borrow more?
@cnp: Precisely the point. These so called-infrastructures are not revenue centres.
Surely ba Chikwanda do you want to build Zambia in 3 years? Even The bible advises to check your income before you embark on a project otherwise its Foolishness of highest order. We wish you a second Stroke ASAP so that you can be discharged from duty because you are now Justifying Chimbwi No Plan motto
Foolish old man of a finance minister
Infact to further nullify your political financial economics, Luxembourg has a population of 500,000 and is one of the highest income economy in the world.
Borrowing is not a tame horse to ride. In the mid-1980s Zambia was forced into bankruptcy because the country was illiquid to service its foreign borrowings. The game then was borrowing more in order to pay interest on already existing loans. But we couldn’t go too far along that road, before things caught-up with us. Those of us already grown-up then, still remember the shame and embarrassment. The mere mention of the name ‘Zambia’ evoked depressing emotions then. Mr. Chikwanda seems to be an expert at forgetting our immediate past and where we have been as a country.
“Most PF MPs are useless” i thnk i believe him, unfortunatly birds of the sem feathr.. We wud rathr stay with the few universities, hospitals, schools n roads rathr thn leave the country in HIPC at the xpense of panicn to impress wen u failed to develop th nation on the actul intendd buget, we knw it wud take long but rome ws not built in a day like u wnt to do wit Zambia…js increase yo borrowin kung’anda kwenu…(•_•) i c u..only wise bloggr
Even if it means increasing domestic borrowing how do jump from 200 million to 13 billion? Do these muppets in PF have what it takes to develop this country?
I a asking myself the same question. How do you increase by about 6,400%? What rationale was used to determine the increment rate?
If you can’t manage the little you have, how can you manage a huge increase?
THE TRUTH BE TOLD THESE FELLAS ARE BORROWING FOR CONSUMPTION WHICH WE ALL KNOW IS NOT SUSTAINABLE. THEY HAVE INCREASED THE WAGE BILL BY 100 % BY EMPLOYING MORE PEOPLE AND UNSTAINABLE WAGE INCREASE AND NOW THEY SAY THEY NEED MONEY FOR INFRSTRUCTURE BOOZA. EVEN A CHILD CAN TELL PF ECONOMIC MANAGEMENT IS NOT SUSTAINABLE. BORROWING FOR CONSUMPTION I REPEAT IS DISASTER. STOP IT. YOU FOOLS.
@matrix, we can raise the money we trying to borrow just by proper management of copper proceeds, not even to mention many other resources. We have for long not sufficiently controlled and managed proceeds from copper. We are weak at this. If we can strictly monitor copper production and its sales we can have sufficient funds that we need with no recourse to over borrowing. We have so far been really weak in the handling of copper and proceeds therefrom. Botswana is good at diamonds, they are tough with controls but with our copper we are feable, we would rather go borrowing and let copper mines owner steal from as as we keep blinking every critical time. Lets just havea grip on copper, we shall not go with bowls for borrowing. Sounds repetitive & borring but that where main solution lies.
Generally in terms of economic management MMD, and particularly the combination of Levy and Magande, did extremely well. Man of action, money dor=e not grow on trees. You are putting a lot of pressure on your finance Minister by your uncoordinated pronouncements of development. Money does not grow on trees! And think about the proposed increase in the ceiling – from 200 million to 13 billion!! My foot. That is the amount of budget deficit these guys have gotten us into. This country which was credit-worthy and solvent will very soon be insolvent under this reckless administration
Where is the eurobond money? GBM has already started spending his share (6 million dollars zesco kt) from that money on expensive gifts!
I urge the Opposition to unite and oppose this motion thou at the end of it all, PF will pass it inconjunction MMD and UPND deputy ministers on their side. Do it with all your might, time will leave to judge you actions. As for Chikwanda, he his also a munshololwa…this guy knows what debt did to mother Zambia, but he his doing it alover again.
I’m ashamed
Frankly i think my grandma can do better economic planning and resourceeeee allocation more prudently than this PF idlers.We’re just mortgaging our kids futures recklessly.
Aba bafi colour, bala tusha munkongole. This needs to stop now. This is the price for recycling used politicians. Twala cenjela pakuti term ipwe. God save us.
This is a wake up call for Zambians, lets vote with our brains not with our tummies. Can someone remind me how many times aba bafi colour have borrowed in the last six months?
PF MAY LEAVE TROUBLE FOR NEXT GOVERNMENT IN 2016. COZ THEY OF NOT GETTING IT
The financial behemoths are always salivating to see suckers like Zambia happy to borrow money. They know very well banana countries like ours are incapable of repaying loans but that’s okay with them. They like to have a lever with which to manipulate a government, and loans and more loans to these undisciplined nations is the leverage they crave. If steps are not taken to remove the PF and immediately reverse this reckless borrowing we are fast headed to UNIP days or worse.
KK Klan mentality.
It is sometime annoying to note that opposition MPs are only seeing politics and nothing else. They are so comfortable with the state of the infrastructure and as long as their houses are OK. Borrowing for infrastructure development is acceptable and should be encouraged. what should be discouraged is borrowing for consumption. The PF is on the right track opening up the country with new roads. these areas will never be the same again when the roads are complete. its so funny that areas served represented by the same MPs are the ones having roads yet they do not want progress on them. Fili uko tuleya as the northerners put it.
Infrastructure development is only a fake excuse to borrow. The underlying motive is ‘more money in their pockets.’ Otherwise, what do they have to show for the Eurobond money etc.?
Borrowing for infrastructure development is only acceptable if you will have the capacity to maintain the infrastracture. We have been down this road before; build things and failing to look after them. The result had been dirty buldings, roads with potholes, uncollected refuse everywhere, civil servants being paid peanuts, etc.
What is of pressing importance is establishing honest reasons to why we have a budget deficit. Governance of a Country is too important to be left to a wishful thinking.
Borrowing for infrastructure development is only acceptable if you will have the capacity to maintain the infrastracture. We have been down this road before; build things and failing to look after them. The result had been dirty buldings, roads with potholes, uncollected refuse everywhere, civil servants being paid peanuts, etc.
What is of pressing importance is establishing honest reasons to why we have a budget deficit. Governance of a Country is too important to be left to wishful thinking.
One thing Mr. Chikwanda appears to have mastered so well while in school is the use of his pen to sign big loans. It’s high time he learned to be a mananger and not a moneyjar! The job of a finance minister is more than just signing loans.
Chikwanda was finance minister 41 years ago and he messed the economy…. he is making the same mistakes he made 4 decades ago.
This is why we shouldn’t put fossils like Chikwanda in that position as they only think of themselves and the next election.
When we see that we are losing out, please let us wait for the 2016 to come. I am optimistically moved that come 2016, will be the end of some current governance.
Pipos sell your houses and invest in dollars. Sell to PF Kaponyas, they have plenty of stolen Kwachas. Kwacha will soon be at a dollar to 9 kwacha. In three years time new government will sit down with IMF and donor community to sort out the mess created by PF and then Kwacha will start going up and will be the time to bring back dollars.
No more borrowing now Mr Chikwanda. Let’s learn to live within our means.
At Matrix and Chinyama. Shame. To compare rsa and Zambia is madness. A province in rsa e.g. gauteng has triple the GDP of Zambia. Capacity to pay and the touted ratios are smokescreens of the most devilish of intent. Simple….Zambia if not checked will slide back into a highly indebted poor country. Courtesy of mad people like matrix who thing you can borrow your way into prosperity and development. The end result will be that once more Zambia will be in a debt stranglehold. God save us!!!
The pf(proud fools)government, have failed the Zambian people.The people of Zambia wanted government to be collecting more tax from the Mines in order to help the nation and in return borrow less.Our leaders are very stupid.For sure its CHIMBWI NO PLAN.Why have the PROUD FOOLS failed to reintroduce the windfall tax.
I am glad the opposition has blocked this and government abused their power last year after increasing international borrowing. Mr. Chikwanda still thinks Zambia has the same problem it did in the 1970’s. He made Zambia have a huge debt worth billions of dollars and wants to take us back. No no no
I’m beyond ashamed,i’m heartbroken by this irresponsible borrowing thereby leaving our kids to pay for the greed of the current useless oldguards.We’re supposed to leave our kids better off not worse.Wajinga sana hawa wazee wa PF.
this govt wants a blank cheque to enjoy the money amongst themselves…its cheating the public its for develpment projects…it will be used for ukwas trips abroad with big delegations,shopping in paris,london, ukwas trips to india,uk and for bye elections which take place every week.
lets act like in ukraine with resistance,,where he president had to flee the country….
It is not too late for government to arrive at a figure that is mutually acceptable to the vast majority of national leaders. That can be achieved through dialogue, negotiation and reasoning around basic principles of international financial transactions. What about 10? What about 9 What about 8? What about 7? What about 6? What about 5? Rejections need to be quantifiable.
@ Matrix
Your non eloquent analysis is so myopic. You can not borrow like a headless chicken without prior planning reason why everyone is against this idea of borrowing.Get real not that empty classroom political Brouhaha like Geoge Mpombo puts it.