Patriots for Economic progress Leader Sean Tembo says Zambia is better off immediately defaulting on external debt in order to preserve some capacity for the country to meet its domestic debt obligations as and when they fall due.
Mr Tembo says the prevailing circumstances would give the country legal protection even if government decides to default on external debt obligations.
He has urged the Attorney General to invoke the force majeure clause in the external debt agreements and write to creditors to inform them that the COVID-19 global pandemic has brought about circumstances that make it impossible for Zambia to meet its obligations under the respective loan agreements.
Mr Tembo said Government shoukd move fast and consider the above measures saying this is not a time for lethargy if the country is going to successfully navigate the economic storm that the global COVID-19 pandemic has brought about.
He added that it is also worth noting that if Zambia is not able to maintain some financial muscle during this period of the pandemic, it will be very difficult for the country to successfully fight the COVID-19 pandemic itself.
Mr Tembo said therefore, the Minister of Finance is as important as the Minister of Health in the fight against COVID-19.
He said PEP is ready and willing to temporarily shelve their differences with the PF and its Government and actively contribute to the country’s planning in the fight against the COVID-19 pandemic.
Mr Tembo said Zambia is facing an existential threat which all Zambians need to treat as such, not only in words but in deeds as well.
And Mr Tembo says it is common cause that the social-distancing guidelines recently announced by President Lungu have resulted in the total shutdown of some economic sectors such as tourism, entertainment, religious services, etcetera, while several private companies have decided to suspend operations and lay off most of their employees.
He said equally, a number of mining companies on the Copperbelt and North-Western provinces, who are a key source of forex, have also started to suspend their operations in the interest of protecting their workers from COVID-19.
Mr Tembo said is also common cause that the lockdowns that have been effected in several of Zambia’s neighboring countries such as DRC Congo, Botswana, South Africa and Zimbabwe will result in extremely low traffic for goods at our borders.
He said in terms of non-tax revenue such as fees and levies, there is no doubt that Government’s main sources are fees related to the movement of motor vehicles such as those collected by RTSA, NRFA, and fuel levies.
Mr Tembo said with Zambians being advised to stay indoors resulting in reduced traffic on the road, there is no doubt that Government’s non-tax revenues have equally dwindled and will continue to dwindle for the unforeseeable future.