By Hjoe Moono
A Zambian economy freed from huge debts; growing strongly and spreading prosperity to all our people would seem to be the ideal and realistic vision of any responsible government. To free from debt, rather than further indebt a nation is the aim of all known responsible governments world over. However, it seems recently that there are exceptions, perhaps only one exception: Zambia. A country until recently growing strongly and steadily with low debt levels, has u-turned into a country with a distorted economic future, high budget deficits and now escalating domestic and foreign debt.
We have stated before, and let it be stated again, firstly, that we have problems in our nation, economic problems, and that our economic problems were not visited on this country by some cruel act of God or forced onto us by nature. No. These are man-made problems created by the PF and imposed on us.
Let us further state, and you would agree, that the government of the day has forsaken the people of Zambia. It has forsaken its mandate to govern and improve the lives of people. Instead, it has gone astray, and made our lives worse off than we were before.
Biggest Mistake? Excessive Borrowing. Too much Nkongole!
We all borrow. But no one would borrow without regard to responsibility of accountability and ability to pay.
[pullquote]Our leaders are celebrating an illusion, for they do not seem to have a clue of the implications of excessive borrowing in the face of compromised fiscal credibility and a poor and volatile exchange rate, coupled with dwindling foreign exchange reserves. [/pullquote]
We are aware of the recent celebrations regarding the new nkongole which is making Zambia a Highly Indebted and Poor Country. Yes, let us face it, we are not yet a rich country, no. But we are a highly indebted country, yes, and our leaders are celebrating at this. What a shame indeed!
Borrowing too much is the cause of Zambia’s problems, not the solution. The PF government has borrowed and continues to borrow too much money. This is creating problems for you and I now, and for our children and theirs in the future when these debts are called in, and pay day is due.
Our leaders think you can borrow without regard to ability to pay, and spend carelessly without regard for the serious needs of the country, and all this done on the premise that more money will be made from ‘somewhere’, without telling you, my brothers and sisters, that it is you to pay for all this nkongole when they are long gone.
The PF is creating probably the worst debt crisis in our history since independence 50 years ago. And all this has been done in a space of just less than three years.
A few of us here today, and many others out there have spoken against this seemingly insatiable appetite to borrow without regard to ability to pay. We have all seen the consequences of excessive debts before, so let us continue to warn against such, let us campaign against sentencing our future to a yoke of excessive debt and poverty.
While we may be putting our reputation on the line by opposing these excessive and careless governance matters currently being perpetuated and while we may be ridiculed for it, we will be proved right, and “Deo Vindici”- God Will Vindicate Us! It is therefore our duty and responsibility to speak against gluttony and carelessness in governance matters that affect us all.
That the recently issued $1 billion Eurobond was issued at an interest yield higher than the initial $750 of 2012 tells us something: That we are now viewed more risky to lend to as a country than before, and thus we now have to pay a higher price for any debt we contract. This should be a matter of concern for all.
With a huge budget deficit, and a compromised fiscal credibility, our leaders are celebrating an illusion, for they do not seem to have a clue of the implications of excessive borrowing in the face of compromised fiscal credibility and a poor and volatile exchange rate, coupled with dwindling foreign exchange reserves.
But one would ask, don’t they surely know? Is greed seriously this blinding in governance that regard for the nation’s future can be auctioned with such little ease?
Free advice to our governance, nothing is more fatal for an economy as highly indebted as ours than further debt accumulation and corresponding rise in interest rates and inflation and a rising fiscal deficit.
Our capacity to generate revenues from the ZRA is below capacity, is there a miracle therefore being ‘cooked’ by the PF that will prepare our economy to face the trials and tribulations that are being created by the excessive debt?
Fiscal credibility is an important yet not some abstract concept: It keeps families going, it keeps children in school and allows then to aim and prepare for a good future.
Fiscal stability keeps firms in business, and keeps people in their jobs. Our nation’s fiscal stability is heavily compromised. One can only imagine that our governance system is out of sync with its responsibilities.
[pullquote]The nation needs its president to address it, not through face book, please that is for teenagers seeking attention. National matters must be addressed head on.[/pullquote]
Zambia is on strange tides indeed. We now live in an age and era of fiscal governance irresponsibility. Irresponsibility in government entails a lack of control of public finances, an excessive exposure of the country to external international money markets through the issuance of Eurobonds even when the domestic currency is heavily depreciated, furthermore even when the ZRA has inadequate capacity to legitimately collect sufficient taxes to fuel governance and development programmes.
This indeed, is gross irresponsibility on the part of governance, and the citizenry may do well to prepare for a pending disaster ahead of us.
Let us beware, that singing and melodically praising the PF’s populist rhetoric will not help our economy. We the Zambian people should demand of three things from the PF with regards the direction of our economy, these:
1. Resolve: that they will deal with the debts and reshape our state to live within our means.
2. Determination: that we shall see clearly what government policy is in place to keep interest rates low, and get credit flowing and ability to pay back the huge acquired nkongole.
3. Confidence: that there are real and tangle measures that will get the economy moving and create jobs, real and tangible jobs for the people.
In conclusion, on the kwacha, let me state that the only trick to getting the kwacha on tract lies in it being addressed by the head of state. We all saw how the kwacha reverted to strength when the nation was addressed by Hon Chikwanda, MP (Nominated), Minister of Finance. We can only postulate that if the nation is addressed by His Excellency MCS, the kwacha may benefit from his strength and resolve and probably be consistently the strongest performing currency.
The nation needs its president to address it, not through face book, please that is for teenagers seeking attention. National matters must be addressed head on.
Lus.aka.t.imes, Mahtani is harassing innocent Zambians. He is after Simataa Simataa and trying to gag him. Ka Mahtani is still involved in money laundering. He is living in Pent house without paying rent. His offices in Finance House are free. His secretary is paid from Insurance company. All monies are being transferred without paying taxes. ZRA is in his pockets. He has continued to flout shareholding requirement in the bank. He is externalising millions of dollars from Zambezi Portland Cement, bribing and keeping millions of NAPSA, ZRA and ministries monies. A Crook that has the audacity to harass Zambians.
Aren’t we all addressing issues online? Sata is following suit, so get with the program or just shut up
We need the money to develop this country. At least we have infra structure development. There is unprecedented road development all over the country. The railway lines are being revamped. Airports are being upgraded. Health care facilities are being improved. There is definately a grand PF plan to develop this country only seen when UNIP came to power in the first National development plan.
SELENI BABOMBEKO
@Yamba, You are talking to people who can see but are blind as long as the development is coming from PF.
Nothing wrong with debt
The problem is if you cant or are failing to pay it back
So go away with this tasteless article
Thanks
Dear Yamba, we all want the infrastructure, but the truth of the matter you can never borrow your way into development. Give reference to Greece, look at the levels of poverty that are in Greece, it is unbelievable. I wish you could have a first hand experience of what debt can do to a nation. Greece is still not having a full impact of their being indebted because of the interventions from the EU and German in particular. Our economy has no capacity to absorb these debts at the rate of corruption in the civil service we are witnessing.
We are not borrowing for consumption but investing in infrastructure, thereby creating employment and capacity to pay back.
we are “target borrowing”… borrowing targeted at specific development projects
borrowing to invest in roads, railway, energy, communication, housing, health, education water and sanitation etc…is not reckless but the right thing to do.
This will further attract investors to our country. we are borrowing responsibly.
Give me one country that does not borrow, that is debt free
IT SEEMS LIKE EDUCATION DOESN’T DO ANYTHING ON THE MINDS OF ZAMBIANS. WHERE IS ZAMBIA GOING TO GET MONEY FOR PROJECTS IF THE GOVERNMENT DOES NOT BORROW? THERE’S A DIFFERENCE BETWEEN BORROWING MONEY FOR CAPITAL/DEVELOPMENTAL PROJECTS IMPLEMENTATION AND BORROWING MONEY TO QUICKLY PRETEND THE GOVERNMENT IS DOING SOMETHING ONLY DURING OR TOWARDS ELECTION TIME. ZAMBIA MUST IMPLEMENT THOSE PROJECTS TO FOR INFRASTRUCTURE BUILDING RIGHT NOW RIGHT HERE AT ALL COST WHEN THE COUNTRY HAS THE REPUTATION TO BORROW. OF COURSE IF YOU EXPECT TO HAVE CHRISTMAS DURING THE PROJECT IMPLEMENTATION PERIOD YOU MUST BE CRAZY IN YOUR HEAD COURSE FIRST YOU WORK HARD AND SACRIFICE AND THEREAFTER WE START RIPPING FROM OUR OWN SWEAT. NO SWEAT NO SWEET- SIMPLE AS THAT. IN SHOT THE GVT IS RIGHT TO BORROW FOR REAL…
Great article worthy reading but the 3 demands stated above will never happen,and the conclusion is the wisest peace of advice to sata.
Sata and the PF found 3 billion in the bank in 2011. Where is that money now?
They have spent it on creating new districts, renaming airports, bye-elections and Satas 3 salary increases.
But they cannot find 3 million for a NEW CONSTITUTION? Something is VERY WRONG HERE!
Sata should not be allowed to open that vile mouth on economic issues. It will just add to more problems. The Kwacha would become more worthless if Sata were allowed to utter a single word.
Credit,says Kiyosaki, is like a heavy loaded gun – dangerous in the hands of a drunken, but safe in the custody of a sober man. And, to add, sobriety requires restraint in borrowing and doing it only when absolutely needed and when planned for. Quite worrisome, what is going on.
Point exact!
PF governance structure is tailor made for poverty. And poverty is the legacy the PF led govt will leave in Zambia. Our children will strangle the most, leaving this country to become economic refugees. The only people benefiting are of a certain family forest and a few being used as smoke screen like Kabimba.
Look at how proud Miles Sampa and team are after getting nkongole as if it is an achievement for Zambia, yet it is actually only an achievemnet for the europeans. It is not a win-win situation. Where is the $750m now? Being canibalised here and there by PF thugs. These guys are jockers.
Injkongole.kaloba mudala it is slavery,how are we going to pay back? Another cancellation won’t happen
Infrastructure development is what we need now.
contracting debt is not the problem if the money got is used to trigger the development of the country. The problem I have with the PF government is consistence. They will say one thing today and do the other thing tomorrow. e.g when they were in opposition they demanded for a people driven constitution but to day they are in the fore front finding excuses not to give the Zambian people what they have cried for since independence.
PF is behaving like a father that makes borrowing a habit. Whenever he runs out of money he dashes out to borrow more even before he finishes paying back the previous debt. Such a father is an *****.
Yes, borrowing is allowed but it should not be a habit and recklessly done like PF is doing it. PF should instead be strategic in the manner it uses our meager resources. We need infrastructure and all the taunted development but it has to match our pocket. Political patronage where all sundry in PF go on rampage promising citizens huge projects that require huge amounts of money should be stopped. This behaviour is what makes them panic and forget they can only do so much with so little. The result is this mindless borrowing.
PSYCHIC OF RURAL FOLKS DIFFERS FROM URBAN VS NKONGOLE!
Rural folks here in Luapula like elsewhere are not concerned with issues of governance but with what they are calling ‘development’!
To them them, development is new roads, clinics, schools, street lights in Kawambwa, boreholes in villages etc. These are the issues which govern their mindset. They are comparing what previous governments have done with what Mr. Sata is doing.
I beg to repeat, folks here, in Luapula depend on their own efforts to survive and not on the Kwacha/Dollar or on the PF/UPND/MMD relationships, Government bonds/loans etc. No. They are crediting these new roads to Mr Sata only NOT to PF or government.
So come rain or sun on voting day, they will jump on the boat with umbrellas to vote for him.
The nkongole is for PF party mobilisation towards 2016 elections. Quick quick substandard and overpriced roadworks and structures for newly created districts to appease voters. The remainder will be used by PF cadres who will flee the country when PF loses the election in 2016 to support their livelihood in Cuba and Sudan.
LAIR
Joe – you know debt is not a problem right? Every big company, country and even progressive individuals borrow to create new opportunities. Your fear of history repeating itself is unfounded. It is based on not clearly taking into account the fact that Zambia’s economy has expanded and our ability to pay debt is far much better than it was few years ago.
In my opinion we need the money to develop the infrastructure on which further economic growth will depend. The PF are right on this one.
Even countries like France, Great Britain and other borrowed after the Brett wood Meeting in New Hampshire , that’s why there are where they are today so PF is not myopic like other noisy neighbors.
The writer is TONGA what do you expect.