Forum for Democracy and Development (FDD) Deputy National Secretary and Party Spokesperson Antonio Mwanza has said the Zambian Government has defaulted on its commitment to pay Lap Green in excess of 382 Million United States Dollars in compensation following a Consent Judgment Order entered into between Lap Green and the Government of the Republic of Zambia.
This is in a case were the Zambian Government was sued by Lap Green following the alleged illegal takeover of Lap Green shares in Zamtel by the Patriotic Front (PF) led Government in 2012
And Mr. Mwanza in a statement to Pan African Radio news today revealed that Lap Green has threatened to stringent measures to recover their money including taking the issue to the international financial institutions and seize Zambia’s assets abroad.
Mr. Mwanza said Government was supposed to make an initial payment of 114 Million United States Dollars in November, 2016 followed by biannual payments of 35 Million United States Dollars in February, 2017 and August, 2017 respectively but the Government has defaulted.
Mr. Mwanza says the implications of the actions that Lap Green is about to undertake have far reaching consequences with regards to Zambia’s standing on the global financial market especially now that the country is negotiating to get a loan of $1.6billion dollars from the International Monetary Funds (IMF) and that the Eurobonds and other debts are approaching their maturity repayment dates coupled with the widening fiscal deficits the country is facing.
“Does Zambia have the capacity to service the ever increasing public debt if it is failing to pay such financial obligations as compensation like the LapGreen one?”
“What will be the reactions of Lending and Credit Rating Agencies and how will that affect our fiscal outlook and standing on the global market once LapGreen takes the Government to international financial institutions?”
“Can Government explain to the Zambian people what the status of this matter is. What happened to the initial 252 million US Dollars that LapGreen paid the Zambian Government? Can the Minister of Finance confirm that the LapGreen debt was added to Zambia’s total public debt which he stated in Parliament?”
“How much debt has Zamtel accrued from the time Government took over its operations? And how much of this debt has been granted by Government? Can the Minister in charge of Transport and Communication explain to the Zambian people how Zamtel is performing since the Government’s take over?”
“We demand an honesty and comprehensive response from Government. Can the Ministry of Finance and The Ministry of Justice explain to the Zambian people what is really going on here?”
“The public needs to know the truth about this LapGreen saga because it’s the taxpayers who will foot the bill. It is common knowledge that Zamtel in its current state is moribund and it is only surviving through Government borrowings and guarantees. The questions that needs serious answers is why did the PF Government illegally grab Zamtel when it knows all well that it has no capacity to efficiently run the entity?”
“What happened to the initial 252 Million US Dollars that LapGreen injected in Zamtel because the company is limping and it is only surviving on Government guarantees? The consequences that we as a country is likely to suffer if this matter and the general public debt management problems escalates are too ghastly to contemplate. As punishment for default, capital markets will either impose punitive borrowing rates or refuse to lend at all”
“And credit-rating agencies will no doubt warn against investing in the country. This issue may appear minute but it is a serious time bomb that if left unresolved will have serious ramifications on the country’s international standing on the global financial market hence let Government explain to the public how it plans to settle this issue before it gets out of hand” Mr. Mwanza said