The PF lead Parliament has backed the motion by Finance Minister Alexander Chikwanda seeking to increase the threshold of domestic borrowing from K200 million to K13 billion, among other adjustments.The motion to authorize the Minister of Finance to increase by Statutory Instrument the domestic loan threshold from K200 million to K13 billion among others has passed after a vote in Parliament.
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.
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A number of countries that are in the habit of borrowing are now on their knees, that is where we are heading to
[/pullquote]The motion passed after voting with Members of Parliament (MP) voting in favour winning by 70 votes against 25 that voted against.
Earlier, contributing to the motion, MMD Mwandi MP Michael Kaingu expressed concern that Zambia risked being in debt if the loan threshold was increased.
“Over-borrowing means that we shall forever have problems with accountability, interest levels will be high and the cost of living will go up and another danger is that economic growth will shrink,” he said.
Dr Kaingu said international lenders would also express doubt and pleaded that Government departs from the idea of increasing the loans threshold.
MMD Chembe MP, Mwansa Mbulakulima who also opposed the motion said it was important that the country’s leaders ensured a bright future for its young citizens and avoid leaving a debt burden.
“We need to care for our children. These are issues that led to the credit crunch in the 1980’s and there is need to watch out, inflation will go up and this is dangerous,” Mr Mbulakulima said.
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.
In supporting the motion, Agriculture and Livestock Minister, Bob Sichinga said the intensity of Government’s developmental agenda made it necessary to increase borrowing.Mr Sichinga said debt levels were much higher under the MMD than under the current administration.
Vice President Guy Scott questioned why the opposition was shooting-down the motion saying that the threshold had not been increased over a long period but that during the MMD rule, borrowing had exceed the K200 million threshold and hit K12.8 billion.
You will purge water.
This is good news
It implies they will create jobs and enhance development.
I hope we don’t have the numpties come here and condemn this government.
Look at it this way, if the bank increased your overdraft and or pre approved a loan for a bigger amount, would you be worried for the bank?
It is good news for the recipient , and in this case for us.
Now let us use that money to good fruition and if history is anything to go by, this government has proved they don’t tolerate plunders and are prudent in their spending.
Please join me in commending them for this job well done.
Give credit where it is due, people
Thanks
Ba Chikwanda what ever you do splashing money around every where will not win you votes. What will make people give give you another chance is good governance and prudent economic management thats all.
Right now you can borrow what ever billions you want, but as long as there is high cost of living for majority Zambians, no new people driven constitution , no rule of law, rampant corruption, poor education and health standard, selective justice people will continue to lose faith in PF. More than 80% of Zambians are resolved to get rid of PF come 2016.
As you borrow and spend be mindful of the fact that we will claw all this money back from you guys and use it clear the debts you will have left behind.
Viva UPND and HH.
Busy condemining Govt nishi internet u are using is borrowed from mtn, laptop from that guy who sales pa nkongole from south Africa, that chair from homecorp, the lenses from Madison insurance. everything about u is nkongole but u still surviving even affording to go watch fally ipupa and tow some girl.
Opposition leaders are afraid that the borrowed will develop this country and therefore stay in power for at least 20 years
This is an exponential jump by any means! Have you looked at the figures properly?
An increase from K200million to a whopping K13Billion – my! what percentage would that be? Ok, for clarity’s sake and I hope I get it right. K200million is equal to £21million where as K13Billion will be £1.6Billion thereabouts. Looking at it another way – that’s like $2Billion of debt awaiting near your doorstep soon. There is no such thing as a free lunch dear Mushota! Each and everyone of us will have to pay it back I am afraid.
Plunderers!
The cost of borrowing will now be on the upward swing.
Imagine the damage to the private sector and investor confidence?
Zambians should now adopt the hire and fire approach.
It’s time to try UPND. If UPND fails us, we fire them as well.
PF will strangle us with debt!
But why do they want to leave above what they can afford? These are full blown symptoms of panicking.
Live..sorry
Because they took leave from good governance, accountability and reality.
Mwebantu sure….more borrowing, PF is choking us. The value of the kwacha against the major currencies is at an all time low. Private bussinesses are shrinking because importation has become expensive. Chikwanda, instead of borrowing, why cant you work on the kwacha to improve its strength first. Though i am not an economist by proffession, my everday living tells me that it is foolishness to borrow too much even if its for a good cause…Why cant we use our small budgets to develop slowly over a period of time that rushing things. Afterall pf has never been known to be accountable for the moneys they borrow. where is the subsidy and eurobond money??
nichani, publish my comment…i was one of the first to comment upto now ati awaiting moderation.
PF is working really hard…. tongas wont rule this great nation.
Really hard indeed!!!
More money in theirs pockets and more coins for the rest which are going to foot the bill for generations to come.
Are you blind my mate? It is writen all over for all to see. Are you part of this planet we call earth in general and Zambia in particular. Dream on!
It’s nit about Tongas or Bembas ruling wechipuba. It’s about having the right team to take our country into prosperity. Look at Botswana, there are no white people in govt, but they have done it. They have honest and unselfish leaders unlike your tribal party now in govt. wake up and start thinking like a responsible human being.
the major sad part is that some people still believes in these people and their bufi party.
Ki masholi! The banks will now start lending only to the government leaving out productive sectors. Wait for interest rates to shoot up! Zambia is screwed big time.
Australia is also BUYING chinese debt stocks….remeber the Romanian debts case against some Hedge-funder in the UK where only the judge could save Zambia? We are in-deep indeed and yo right – we getting eff’d big time !!! vele vele sadi awisi…
That is true.
This is a sad development, why cant the government look for more ways to collect taxes from mining companies especially as they don’t get enough from them. Why borrow, our country seems to be headed for disaster , look like we are back into the 1970’s. Anyhow its Zambians to blame its the same old people that made the country get into the same problem last time and they want to take us back to the same situation. How could we have expected people that put us in such a situation last time to provide a different solution?They are using they same old ideas.
good suggestion. give me 3 ways of collecting tax from the mines? we need brilliant minds like yours!!!
I think the best way to avoid the mines cheating the Zambian government is for the government to sell copper on behalf of the mining companies as an exporting agent or Zambia to collect 15% of the minerals produced from mines in form of taxes in kind and sell the minerals them selves.
The government can actually stock pile some of the copper , silver and Gold as reserves to use as collateral for borrowing against. In this way the government will be able to borrow at highly reasonable competitive rates. When the minerals in the stock piles gain value, the debt acquired also diminishes in value technically.
This is just my idea on the hoof ,not tested but it is a good candidate for trial. In other words I am trying to think out side the box or squaring the circle .
Plausible hey?
You suggestion is exactly why Zambia is in this position; heavy reliance on the mining sector. Zambia’s economy needs to be more diversified. If government is borrowing to improve infrastructure and to invest in education, that might improve economic conditions in the long run.
@Concerned Citizen
Don’t be in hurry to condemn my suggestion. First read my blog and think before make deductions. My suggestion should not be the only solution to our problems in Zambia. But at least it can help Zambia be in control of the mining revenue and minimise the cost of borrowing.
Borrowing for infrastructure is good if and only if 95% of labour,95% of products and 95% of contracting companies are Zambian. Unlike in the current situation, highly paid labour is foreign, 97% of products used including equipment is imported, and to make matters worse, the majority of the contracting companies are all foreign. So in essence all what the country is doing borrowing for consumption which does not help local highly skilled labour force nor does it promote local manufacturing…
Borrowing is a recognized way of meeting capital needs. The other alternative is theft, which of course we refuse to do. The second option is to dream, which of course we refuse to do. Let us borrow to finance infrastructure development when the resources available are inadequate. The nation is catching up on lost decades in underdevelopment.
And previous debt also brought huge development in a form of education of various Doctors like you.
We are finished as a country. PF where are u taking us???
Don’t complain, just target to buy shares in banks. The banks will be the winners.
Wasn’t this the same old man who signed us into HIPC in the Kaunda administration.
Chachine tu ka nya amenshi.
#OneZambia
Thats the way forward PF! Teach these UPND prophets of doom a lesson. Let the monies be borrowed and surprise these cattle boys with huge developmental projects
More likely white elephants
Kudos, you are the most retrogressive element. You look un-Zambian.
janza kumbele Im very much zambian. I only look forward so your retrogressive assessment is incorrect. I look forward with all the developmental projects going on. PF is surely outshining the previous regime and you cowboys will shed tears in 2016. PF will convince the grassroots easily as to why they should be voted back in
After the removal of subsidies,nkongole.No wonder you are losing by-elections.
Busy condemining Govt nishi internet u are using is borrowed from mtn, laptop from that guy who sales pa nkongole from south Africa, that chair from homecorp, the lenses from Madison insurance. everything about u is nkongole but u still surviving even affording to go watch fally ipupa and tow some girl.
Anyway, this is also fuel for the opposition during their campaigns in 2016. The PF intends to use this money on projects without plan they will start all over the country but people are now clever in that they know that any fool can get a loan. It is not rocket science or good strategic planning to recklessly get nkongole. We know that we are now highly indebted with these loans they are getting instead of using other avenues for money needed for these projects. Instead they are pocketing the money from mining companies and dismiss windfall tax and then get nkongole which their children will not pay back. I hate Chikwanda, his nephew Sata and PF generally for enslaving us again into debt.
Were was chikwanda when magande reduced $7billion through HIPC?Pls Nawakwi and Magande educate these borrowers.
@142 were are those doctors who were trained with borrowed money? Abroad!
PF is working hard they need to be given more time,my foot…….mealie meal prices moving from K35 to K98 in three years of their reign.Only a person as brainless as a maggot my think PF is driving the country forward ,even the president acknowleged that his MPs are useless which meant that PF is useless.
Sata and his Uncle dont mean well for Zambia
Mwebantu sure….more borrowing, PF is choking us. The value of the kwacha against the major currencies is at an all time low. Private bussinesses are shrinking because importation has become expensive. Chikwanda, instead of borrowing, why cant you work on the kwacha to improve its strength first. Though i am not an economist by proffession, my everday living tells me that it is foolishness to borrow too much even if its for a good cause…Why cant we use our small budgets to develop slowly over a period of time that rushing things. Afterall pf has never been known to be accountable for the moneys they borrow. where is the subsidy and eurobond money??
The increase in percentage is abnormal.Something is wrong here?
hope this money goes to good use.. not ukulakongolafye
Borrowing is good if it is done thoughtfully. But borrowing in order to induce by-elections is what makes us bleed to death. May I just find out from anyone on whether we have already exhausted the USD750,000,000 euro bond? By any measure, this is is a lot of money where its usage is supposed to leave serious positive impact behind. Please where are we with this cash? How much is in the bank? Otherwise I forsee trouble for our children in the years ahead.
Well done ha chikwanda atleast U won’t be there to see us young ones pay off yo stupid loans. More money for sure. What a shame
Silly ones are saying this is a good move,…. I don’t blame you because your mind and brain are as poor as that of Tata and his Uncle Chikanda. You always see things with Tata’s eyes.
Best news on the Zambian financial times so far! I have been worried with the tendecy of borrowing small amounts. But then again you should have aimed at a big 50 billion Kwacha I actually thought this was 13 billion Euros? Still this is nothing, if we need to develope we should be ambitious and that means borrowing once or twice gigantically, not 10/20times per year small meaningless amounts while incurring tornado interests. Perfect Mr Chikwanda Sir! I hope Miles as the next youngest president next year leans from this and keep close relationships with Italy, we need them young nowadays they are the only hope. Besides Miles has a record full of creditable development in Matero, he can manage to bring Zambia on a correct road map to a great success!
Another development he has brought is to have as many women as possible
Buckle up guys we’re going into a debt sparrow….expect high cost of borrowing for us and increased cost of doing business in the country….another nail in the Private Sector.
This recklessness will not take us anywhere with these empty tins…how is that the previous gov’t was able to maintain those subsidies and beef up reserves at the same time. Guy Scot should be utterly ashamed for making comparisons between his useless gov’t to the previous regime.
Why were there only 25 opposition MP’s where were the rest the tax payers need a valid explanation you are paid to represent tax payers by fulfilling your duties and exercising due diligence
The writing is clear on the wall!
Just wondering how we can stop this Chikwanda nonsense of raising borrowing levels from 200 billion to 13 trillion in old currency! This is madness of the highest order!
Time for mass action is now to stop these pathetic failures from destroying the little left of our country!
It’s hire and fire now.
We fire PF and hire UPND.
If UPND goes the same way, we’ll fire them too!!!
Nga walikwata ubwanga, just bewitch him
Please, pay up the small business people who supply simple things like food to govt institutions like hospitals, boarding schools, prisons, the defence forces. These business people wait far too long to get anything from their investments! I have personally suffered great injustice from govt since MMD to PF. Help them they will live better lives, they will employ others, they will develop the national. Just check on their inflated figures they give so that they do not steal from govt through over charging.
I remember HIPC tag applied at school level, seeing a poor child and the teacher was saying ‘Nika HIPC aka’. HIPC stood for Highly Indebted Poor Countries, I do not know if it has changed. Debt is always tricky, especially the interest it attracts sends the debtor into the void. At individual, community and national level, debt can be tricky.
Borrow hard before you get bundled out!
Ba Chikwanda balemera. I know every debt he acquires for zambia 10% is his while 40% is given to the middle men like in the case of Andrew Banda. The country gets less 50% and these are usually donk jobs.
Excessive borrowing will ensure the opposition have enough to shoot this one term government!
Imwe Ba LT shani segregation. Where is my comment?
This is good. I commend govt for this. It’s better to borrow from your own citizens than elsewhere. We will never hold Zambia at ransom on account on being owed money by our country.
You are right, but what you seem not to understand is that you will have no private sector and the little jobs will go be gone as a result of high interest rates and not being paid by a govt thriving on borrowing. The main issue is that a lot of you PF supporters are blind to the real issues of economy, hence you think of in terms of ba yama baleteka and tulelila.
Zambian parliamentarians =150 elected,
150-10(nullified)=140-95[those who voted).so does it mean 45 mps are ministers in pf govt and they absconded.opposition mps are a let down.
My question exactly. What are the opposition MPs doing? Where are they when we need them? They surely can vote against some of these motions that these good for nothing ministers bring to the house.
I sooo hurt politics now. No politician really cares for us. It is an illusion to think that these oppisition MPs are in parliament for the people. They are there for themselves and to fight to get into government so that they can benefit from governement deals like their friends who are holding power now.
May God deliver us from the hands of these politicians (Everone whether in government or opposition).
Back pockets and self exile to an island. Buying Chinese debt and mining investment. Tactics people tactics. Our resources are so valuable and wanted, we should be more assertive. We should be able to raise this short fall with proper audit and taxes. The investors that are true to our us will come
the borrowing has has nothing to do with increasing my capital inestments but is more like a cushion to mitigate misadventures in the name of by-elections, as well as other unbudgeted actitivites.
Zambians brace yourselves; bank lending interest rates will go up as a result. It will be like Chiluba times when interest rates reached 120%. Then banks will find it more lucrative to lend to GRZ other than the general public as is now the case (thanks to Levy Patrick Mwanawasa).
Here we go again! We need not look too far in the past to see the ruin debt had left this country in the 90’s. We will all suffer