United Party for National Development(UPND) President Hakainde Hichilema has said that the latest revelation by the PF Government that the will be used to finance the 2016 budget is absurd. In a statement released to the media, the UPND leader said that what the PF Government was telling the nation was that henceforth country will borrow to finance consumption.
Below is the full statement
This week the PF have once again shown their lack of understanding in managing the economy, revealing how the latest Eurobond will be used to finance the 2016 budget. This is absurd, what the PF is telling us is that henceforth we will borrow to finance consumption.
As we have stated before such loans are only sustainable if and when they are invested wisely and not merely used to cover general expenditures. In fact, these funds must be invested into areas that will deliver returns if Government is going to be able to meet repayment obligations, which have now spiraled to take up 7.1 billion kwacha of the 2016 national budget. This is 2.8 billion kwacha more than our healthcare budget! PF must and should invest the Eurobond in productive sectors. A productive sector is a sector that has capacity to grow and pay taxes to Government. This is what is logical.
We say that if we can eliminate waste at the heart of Government then there really is no need to use this money to cover recurrent expenditures like the ones that are going to be for the newly created Ministries. If we can reduce the size of Government, limit the heavy Presidential travel schedule and minimise or completely do away with by elections then a great deal of money can be saved. One by elections costs us a minimum K10 million kwacha that can supply water to over 2.5 million people. So just one by-election denies 2.5 million people clean drinking water.
The savings from this wonton wasteful expenditure is the money that we in the UPND would use to then re-invest in education and healthcare and other critical social services. At this time, as a nation, we need to be investing in strategic areas that will create jobs, such as programmes that provide business start-ups with access to finance, or training of community healthcare workers. Such initiatives will both create jobs and deliver an additional return for us, through improved service delivery or economic growth. Why can’t PF reorganize Development Bank of Zambia and make it the conduit of industrial development. An amount of US$1.25 billion is a lot of money by any standards.
Regrettably this is not the first point on which the 2016 national budget has come under criticism. Analysts, both local and international, have already expressed concern that targets such as to halve the budget deficit in 2016 are unattainable and lack credibility. Barely a month has passed from the day Hon Alexander Chikwanda read the speech in parliament where he announced that his Government was targeting single digit inflation; we have hit double digits at 14.4%. In addressing the current economic challenges it is of fundamental importance that our plans have credibility or we will not be able to win back confidence.
Without confidence it will only become more and more expensive for us to borrow, and investors will more and more take their money elsewhere. Remember, Government has a responsibility to us, the citizens, to spend the money it has borrowed on our behalf wisely and with great care!