By David Kapoma
On July 28, 2015, the government through the Minister of Information and Broadcasting Hon. Chishimba Kambwili announced at a press conference in Lusaka that cabinet had approved the creation of a sinking fund “the fund will help to ensure accumulation of resources for the repayment of the bonds at maturity. The move will reduce pressure on the national budget and mitigate against foreign exchange risks.” Mr Kambwili said the establishment of the fund will also ensure the credibility and integrity of the country on the international capital market.
Going by the words of the Minister of Information and broadcasting at the time, it is clear that government had good intentions and meant well in creating a sinking fund. If this fund is managed properly, the country may not feel as much pressure when the repayment time for the loans come.
The dictionary defines a sinking fund as “money served by a company or government for the purpose of loan repayment.” Other definitions states that “a sinking fund is a means of repaying funds borrowed through a bond issue through periodic payments to a trustee who retires part of the issue by purchasing the bonds in the open market. Rather than the issuer repaying the entire principal of a bond issue on the maturity date.”
A sinking fund is public fund which the citizens must have full information about. We the citizens must monitor how the funds are accumulating and ensure that such funds are protected from abuse. This is a responsibility of every Zambian regardless of one’s political affiliation. As it stands, we can only monitor the growth of this fund through the minister of Finance. This is a very important project which the government must treat with seriousness as it has the potential of reducing the burden on the treasury when we start repaying the loans in 2022.
I am however, concerned with the loud silence from government regarding this fund. The newly appointed minister of finance has said nothing about it, not even in passing. It is common sense that the idea of using Zambia Railways as a major contributor to this fund did not work as the company is still struggling despite government pumping in millions of dollars. We are at greater risk when government decides to remain quiet regarding the issue of the sinking fund. We may just realise that the facility was in fact never created and no money has been served.
Zambia’s current total public debt stands at $9.75 billion dollars. The debt is made up of $6.05 billion external debt and $3.7 billion domestic debt. The total public debt has increased from $3.5 billion in 2011 to about $9.75 billion today, an increase of 176 percent. It is good however that government realised how huge the debt is and came up with the idea of creating a sinking fund which in my view and I believe the view of many people is the safest way to ensuring that the country is prepared to pay the debt in the next few years as pre-conditioned.
Having said that, I wish to challenge the Ministry of Finance through Hon. Minister Felix Mutati to provide the nation with a report on how much has been served, where the account for the sinking fund is held and how safe the fund is from abuse by government. With the current financial situation, it is very tempting for the government to touch on such money, a development that may injure the country’s economy even worse in future. Government must treat this matter seriously and ensure that the country does not find itself in a situation where paying back the loans becomes a mission impossible.
WHERE IS THE SINKING FUND?
God bless Zambia
Its in Kambwili’s stomach.
It was Donchi Kubeba as usual! Everything PF says is the opposite, don’t listen to them now with their dununa backwardness. The PF bandits shared everything, check their gluttonous stomachs.
The Skeleton Key
~206~
The Sinking Fund……. its Sunk into Chagwas Pocket……… 23 Million to be exact!
Lies, lies, lies! It was a total fiction by PF. Zambia will default on the repayment of the Eurobonds. PF are incompetent to follow even basic Finance 101 principles.
He literally meant to say the funds were “sinking” as in Zambia being broke!
Sheik KZ has used the money to buy himself a private jet
Mr Kapoma, you should choose the things that you believe by scrutinising the person who is saying them
BUT GOOD THAT HE IS BRAVE ENOUGH TO BROACH THE SUBJECT. NOW WE NEED ANSWERS FROM THE SHIP MASTER OF THE TITANIC
well spoken David may I add that people still believe that money will be saved through the removal of subsides, how? that money is not there in the first place,for example, if you don’t have money to pay for your bululu’s school fees, then you ask somebody to pay. Will you have money saved in the bank? If Zambia hard the money saved from the removal of subsidies last time, that sinking fund would have been funded by now and interest payment would have been easy.
The stinking fund has been stolen by the stinking thieves like the stinking “honourable” ministers.
Just the same as these selfsame ministers have not paid back their illegal salaries and allowances ordered by the stinking ConCourt.
This stinks to high heaven of CORRUPTION.
Where is the sovereign fund?
It was just a ploy knowing that many Zambians are illiterates who cant say anything and they don’t even know what a Sinking Fund Account means: Go to Easterners, Northerners, Luapula, Muchinga and ask them this question ” Ba Mayo what is a Sinking Fund Kambwili was talking about. No Idea from these People” So forget and just work hard own your own and your family then you will leave a better life.
@6 Mentor,
Not only are these illiterates, & indeed some educated Zedian’s unable to answer or conceptualise what a Sinking fund is, BUT will kick you senseless throw stones at you, & once your are unconcious, they will line up, & dance Dununa reverse on your body, for daring to question their Dear leader, & his dishonest officials
These types of ignorant beings can NEVER be cured or helped, & only hunger, poverty, & disease, evenutally kickstarts their dead brains into thinking & properly weighing out & analysing situtions.
LET THEM EAT CAKE!!
@6 Mentor,
. Not only are these illiterate, & indeed some educated Zedian’s unable to answer or conceptualise what a Sinking fund is, BUT will even go to lengths of assaulting, stoning you, & once you are rendered unconscious, step over your torso, & dance Dununa reverse, for daring to question their dishonest ministers / officials, including their humble Dear leader Chagwa.
These types of ignorant citizens can NEVER be cured, & only hunger, poverty & disease will eventually kick-start their ceased brains into properly thinking, weighing out & analysing critical situations.
LET THEM EAT CAKE!!
Kambwili and Lungu are two PF politicians who have lied to the Zambians without feeling guilty or shame at all. Kambwili lied to the miners that none of them was going to lose employment but we all know what has happened. He lied that whatever economic problems that the country was facing was not caused by PF but was global. Lungu just the other day on a bemba program of ZNBC was telling listeners that only a few people with vehicles benefitted from fuel subsidies so it was only fair that the subsidy on fuel is removed! Was this drunkard telling the truth! This must be dullest president in the whole world!
You want to dive into the sea to steel the “sinking” fund.
to steal
Can the kaponyas kudos, HH Techilema , Mr Terrible and patriot abroad pleas offer an explanation instead of wan.king all day in anticipation of the letters HH ??
Don’t trust the pangarian family on anything.
So, in short, we did not have a clue as to how we were going to repay the loans/bonds at the time we were contracting them…..? Do we have economists in this country? There’s something seriously wrong here