Home Headlines Zambia’s Hidden Debt Crisis:Part Three-Mutati is Lying about Zambia’s Debt

Zambia’s Hidden Debt Crisis:Part Three-Mutati is Lying about Zambia’s Debt

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Dr Nevers Mumba at the news conference


By Dr Nevers Sekwila Mumba

The recent announcement by the IMF that they will not bail out Zambia with an estimated $1.3 billion loan did not come as a surprise to us. This was because as we have shown several times before, the official debt position of $7.5 billion as announced by Finance Minister Felix Mutati in Parliament before the whole world is a big blue lie.

Back in July, we produced an analysis to show that using figures from the Ministry of Finance itself, the total debt position, including local debts is at least $23.4 billion and is at risk of reaching $31 billion very soon if the PF get their way with new loans they are currently seeking. The external debt component of this is not less than $16.6 billion, factoring in debt repayments of the principal amount which so far total $888 million and 2017 debts estimated at $4.2 billion as of July 2017.

The IMF is aware that the external debt of Zambia is unsustainable and has reached a level where the Zambian economy will be under tremendous stress in the coming months. The fund has repeatedly advised the Minister of Finance to place on the table a proper plan on how he intends to correct the ballooning debt.

The IMF already knows that the Minister of Finance lied to Parliament and the world when he under-declared the national debt stock. This singular act is enough to cancel the discussions for a further loan facility with the IMF.

Mozambique suffered the consequences of lying to the IMF when it contracted $2 billion of secret loans of which $500 million vanished into thin air and obviously lined people’s pockets. After the lie was uncovered, donors suspended aid to Mozambique and the country defaulted on its debts.

So the announcement by IMF that our current relationship with them is tenuous was fully expected by us from 6 months ago. While politicians may lie during their political campaigns, the economy is a different field which operates on the integrity of numbers. As they say, numbers don’t lie. The numbers clearly show that Zambia is on a path to a sovereign debt default within 3 to 5 years and the corruption in the PF has worsened our prospects of quick recovery.

We wrote to the Minister of Finance earlier this year and sent him a verified breakdown of our debt analysis and debt repayment schedules for the past five years. He has not refuted the authenticity of our calculations.

There may be a variance of even a billion dollars on either side of our number, but what is true is that the figure of $7.5 billion from the minister is a pure lie. If it was not, the IMF would not have said our debt is unsustainable as this number only represents about 33% of our 2017 estimated GDP, well within normal borrowing limits. The big question is, why is the minister lying about the debt stock? To whose benefit is he lying? Are we seeing parallels to the Mozambique situation? Are millions being secretly siphoned out of the treasury through corruption?

The Finance Minister needs to come clean on the true debt stock as revealed by his own Ministry figures and place on the negotiating table a program that outlines a change of approach in regards to borrowing. The answer to all these stress levels lies in the PF government drastically reducing public expenditure and arresting theft and corruption.

The PF government has been on a long spending spree, buying rubbished second hand fire trucks for a million dollars apiece and overpriced ambulances for over a quarter million dollars each.

In 2011, PF inherited from MMD a small $3.5 billion debt position with debt servicing at 3.5% of domestic revenues. Total loans contracted by MMD were a tiny $504.8 million which ballooned to $1.31 billion the very following year in 2012 under the PF.

The PF are the most fiscally reckless government in Zambian history and stopping this senseless spending must be a precondition to any continued talks with the IMF. Under the prevailing circumstances, the PF government will have a tough time to convince the IMF with such a hidden, mysterious debt undisclosed.

Attached are some charts we constructed using data from the Ministry of Finance Annual Reports 2011-2016 (with our own 2017 estimates) and the government Yellow Books 2011-2017 (attached also is the list of new loans 2011-2016) so that Zambians can see for themselves how their leaders are lying to them and the whole world without shame.

Zambia’s External Debt Position
Zambia’s Additional External Debt
Zambia Total External Debt Servicing
Zambia Total External Debt Servicing (% of Domestic Borrowing)
MOF Annual Report 2015 page 51

MOF Annual Report 2013 page 59
MOF Annual Report 2011 page 52
MOF Annual Report 2014 page 51

REFERENCES

1. Ministry of Finance Annual Reports
http://www.mofnp.gov.zm/index.php/pfm/viewcategory/59-annual-economic-reports

2. State loans at heart of Mozambique debt scandal
https://www.ft.com/content/805d2b58-59a2-11e7-b553-e2df1b0c3220

3. World Bank sees faster GDP growth for Zambia, warns of rising debt
https://af.reuters.com/article/africaTech/idAFKBN19K0TK-OZABS

4. World Bank Zambia Data
http://data.worldbank.org/indicator/NY.GDP.MKTP.CD?locations=ZM

5. IMF 2015 Zambia Debt Sustainability Report
https://www.imf.org/external/pubs/ft/dsa/pdf/2015/dsacr15152.pdf

6. Zambia has highest debt in Sub-Saharan Africa – IMF

Zambia has highest debt in Sub-Saharan Africa – IMF

7. Zambia’s Hidden Debt Crisis: Part Two

8. Zambia’s Hidden Debt Crisis: Part One

49 COMMENTS

  1. Chitapankwa Allepo Trump
    This is the sort of analysis Zambia needs. The onus is on the Republican President to stop corruption. Mr President, what more evidence do you need over the fire trucks to fire someone?. And the ambulances? You can't appear too good to bad people Mr President. Don't right the wrong. You are wronging the right in the process. This thing will bite you Mr President if you don't act now.
    • ndobo
      From the time I knew Edgar as a drinking mate, way back,,,,, the guy is a 'hider',,, he would hide his beer,,, he would hide his salary, but when he is broke, I could buy his beer..... So this hiding of kaloba does not come as a surprise to me,,, Edgar hides alot, it's only that bana dalisto ba li kosa
    • tinta
      How can he fire anyone when his hands are soiled in these corruption scandals. KK would have fired many because he was different uyu ena ni Koswe Mumpoto
    • Jay Jay
      Imute wa Kalilo - Mutati is an Accountant appointed by Lazy Lungu...who in their right mind would place an Accountant to do the role of an Economists. In MMD the highest position he was able to appointed to was Commerce Minister.
    • Wantanshi
      Zambia has officially replaced Zimbabwe as the new sinking titanic. It's just now a matter of time before a massive exodus of hungry, malnourished, poverty stricken population begin invading other countries in search of jobs and food. It's the price of giving power to insane, clueless drunkards, thieves and miscreants. The least that can be done before it's too late is to force the charlatans out of power immediately! Don't wait for 2021! There will be nothing left to call country after the thugs have stripped it out.
    • analyser
      You are right Nubia Zambia should have been saved but we got cursed by getting KOSWE instead. It's Mumba's fault. I agree 100%
    • The Chosen One
      The debt question is vexing. GRZ needs to be transparently reacting to all innuendos. There's no gov't that doesn't borrow & IMF concern is about future debt contraction & servicing after it comes in. Will IMF support instead spur more Chinese borrowing or be used to service opaque Chinese loans? That's the answer IMF is looking for. Although information published by Dr Mumba was intended to harm GRZ it actually proves how this GRZ is pro poor & pro development & # of these important projects covering whole country is remarkable. What we need, however, is transparency & discipline. God Bless Zambia
  2. Mwape
    I dont understand what all the commotion is about. If the Chinese are supposedly stupid enough to keep dishing out loans, and if there is a repayment default, they only have themselves to blame. Lenders must protect their own capital. If they squander it on reckless loans, and it becomes a bad debt, you will pay for your stupidity
    • Jay Jay
      Repayment defaults work for the Corporations and business entities BUT when it comes to a country its another matter govts come and go but the debt remains. This is why I detest useless visionles people like Lazy Lungu he will not be the one paying off this debt its our grand children and children.
  3. Mwape
    The beauty of democracy is like this : Chikwanda borrowed and wasted billions. He resigns or is voted out. He is not personally liable for repayment, the next minister of finance will deal with it. If the loan term is at least 10 years you will not be in power. You walk away and let the next man sort it out. Thats why nobody cares how many billions are owing. Cyril will inherit Zumas debts, JL will inherit Dos Santos, etc Who cares what Zambia owes provided it doesnt come out of your personal pocket. Thats democracy
    • Jay Jay
      And this is why I hate cadres with a passion as they do not see it that way...they will even take upon themselves to issue a national manhunt for singer for telling the truth!!
    • Jay Jay
      That could work in KK's era where everyone banked with Barclays & ZANCO...these fooools bank in offshore accounts now!!
  4. Jay Jay
    We told you at the start of the year that IMF would not give a billion dollar loan to a reckless govt like Lazy Lungu's you didnt want to listen, all that jet fuel, accommodation and paper costs in Washington the sly accountant Felix wasted would have been used to sink boreholes in rural Zambia where villagers are still drawing water from rivers and been preyed upon by crocs.
  5. Jason
    Of all the things in life that are difficult to change, numbers should be the easiest. Do not worry Zambia! Keep your head down and keep working. But do not be ripped off by frauds and charlatans.
  6. E B HIBALWA
    LITTLE EDUCATION CONFUSES PEOPLE...NEVERS SHOULD GET BACK TO SCHOOL. WHOEVER PENNED THIS FAKE ZAMBIA DEBT ANALYSIS IS EQUALLY A FONTINI.. THIS SHOWS THAT, DESPITE YOU BEING AN EX MAN OF GOD, YOU ARE STILL A PATHOLOGICAL LIAR. WHERE ARE YOU GETTING ALL THOSE FAKE FIGURES...
    • Imute wa Kalilo
      There is no smoke without fire. Somewhere between real and and unreal lies reality! Look at it from the top down, or from the bottom up - whatever is your choice, the dazzle is clear. One has to be blind not to see.
  7. Life Experience
    Cadres like mwape are very foolish, anti' 'Who cares what Zambia owes provided it doesnt come out of your personal pocket. Thats democracy' such mentality is why Zambia is the 3rd hungriest country on earth, the few in power and their families are the ones that eats while the majority are poverty stricken. People we must use democracy to work for us, we need a GRZ that will develop this country not this koswe mumpoto GRZ and we have the power to put up and pull down. Do not listen to people like mwape', he is the koswe family.
  8. Joinnus
    i dont think if the so called man of God has analyzed properly that is y dont take two things at a go church and politics it will mix up and in the end is something else.....Man of God be truthful.
  9. Pimbilimano
    Somebody will pay through taxes. That somebody looks like me and you. The question is, what will we be paying for?
  10. Advisor
    Who doesn't know that Felix Mutati and Nevers Mumba are enemies of each other? They are both half president of MMD. Now mr Mumba thinks this is a platform to discredit his adversary. Where did he learn that mathematics? All we know is that mr Mumba used to give himself some titles in church when he was a man of God until the time he decided to backslide due to love of money. Now this man is a staunch lier. I don't even know what he is doing in politics with 4 supporters only.
    • Imute wa Kalilo
      This is about "NUMBA' (NUMBERS). It's not about Mumba or Mutati, not even about Mutai! It's about numbers, very scary numbers. Facts speak, they tell. And this, their tale, is worrisome. It is troubling. The money must have grown legs and left Zambia. Otherwise, where is it?
  11. Amagenge
    PF Sata and Chikwanda got most of these loans within the first year. Poor Edgar does not know what to do. Everyone is stealing. He can only trust Mutati. One does not need to be an evonomist to be Minister of Finance . The controlling officer PS and his team need to be. Appointing people as ministers in their field causes misery. Look at Nkandu Luo at Health, kabimba at Legal. Chikwanda at Finance etc.
    • Spaka like lilo
      Nkandu luo has come up with some bold decisions at education , like ID cards at UNZA and unbundling of UNZA.....
  12. Kaz
    Provide your analytical argument against Nevers Mumba instead of arguing from without. Typical and wonder why the country is in this mess?!!
    • abilima
      There is no analysis about what Mumba has presented but just figures. The analysis is about the accountability of the borrowed monies. Just to put a spreadsheet and cry reckless is actually reckless.
  13. Concerned Citizen
    Zambia needs to diversify its economy; PERIOD. This effort will require a government with the ability to develop a well thought out strategic plan for the next two decades. Unfortunately the current government is more concerned with shopping trips to New York. It's going to be a rough few years for the country.
  14. Tagagani
    Let us have prudent minds here instead of just being negative to people who are trying to show us the financial failings of the government and minister in question. The problem we have as Zambians is that we fail to embrace simplicity even when facts are given to us to see. 5 years from now you shall experience the effect of this debt, unip under Kaunda incared a lot of debt and it kept our peopke suffering for a long time until when MMD pleaded with IMF to cancel the then Zambia's debt. So I want to hear what the ministet of finance has to say over this and if this is true they should first of all put their in satiable appetite for bollowing on hold.
  15. Fred Nkhuwa
    Woow now this is being a Doctor. How i wish the so called rich men and educated would come up with such analysis, with evidence or atleast with references and show us that they are indeed doing something in the background. This is much better that going around complaining about stolen results and no evidence, tjis far much better that insulting your leaders forgetting the good roads, environment and peace you enjoy is as a result of country having leaders. Doctor Never Mumba Sir, this much appreciated and ask that you continue writing and meeting our leaders face to face give them directions were necessary. This will us and leaders be accountable. This is a mature way of living , mature way of true leadership instead of standing on a hill discrediting, insulting and fulty-finding...
  16. vuyo
    NEVER-SEE LITOLE LYAMBWA, THIS SATAN IS EVIL ANY FOOOOL WHO ABANDONS CHURCH FOR QUICK CASH CANT BE TRUSTED. THIS IDIOOT SHUD LEARN TO SHUT THE HELL UP.
    • Chilize! Utongoke
      @Vuyo you are an ushole, you son of a b1tch, Read the story and debate on substance. You rush to judge and smear him because he's telling facts and you hate to have the truth come out.
  17. Muchimba
    Ba Felix Mutati is a liar and I don't know why Zambians cannot see through him.This man is serving his own interests and the way he lied about the debt we owe as a nation, in developed countries he would have been fired. He has lied about a lot of things. I' am not saying he is not intelligent but he uses that for his own good and to position himself for presidency and he lies so that the president looks so useless. This man by conduct is not supposed to be finance minister.
  18. Vuyo
    @Chilize! Utongoke# HAVING IDIOTS LIKE YOURSELF, ZAMBIA IS SURELY HEADED FOR FAILURE, IDIOTS LIKE YOU WILL SUPPORT ANY FOOL THAT IS ON THE OPPOSITE OF PF/EDGAR LUNGU, WITHOUT TRY TO THINK FOR YOURSELF FIRST. DON'T YOU KNOW THAT THIS SAME FOOL WAS PART OF THIS KALOBA, THE KALOBA MWANAWASA N KABWALALA RUPIAH GOT IS PART OF ALL THIS MESSY SO YOUR STUPID EVIL MUMBA CAN'T BE TELLING US JUNK. I BET YOU ARE ALSO SIDING IMBECILE CALLED BINGIZA (DUNG BETTLE) CALLED KAMBWILI NOW, FORGETTING THIS IS THE MOST CORRUPT BUFFOON, AND I KNOW HIM PERSONALLY, HE USED TO PAY JERABOZ TO STEEL RAIL LINES FOR HIS SCRAP METAL BUSINESS. SO I SUGGEST THAT YOU THINK BEYOND YOUR STUUPPID STINKING MUSULA AND TRY HARD TO MAKE SOME SENSE N NIT BE A BLIND SUPPORTER U CHILI UMWAICHE DON'T B LAZY TO THINK MY GUY
  19. Vuyo
    While it's true PF/EDGAR are thieves, having asssholes like devil mumba n BINGIZA (dung beetle ) kambwili, dilutes the whole argument to just politics. In zambia we can't have dung beetle, devil mumba,rupiah banda, nawakwi, chikwanda, mutatI,hippo (gbm), masebo lecture us on corruption. I wud even choose to listen to kachema (hh) lecture on corruption because apart from him being tribalist there isn't much evidence to prove he stole money under chiluba's privatisation, ka chiluba was the one stealing kacgema was just that naive stupid idiot who had no voice then.

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