Opposition leader Hakainde Hichilema has offered to render free debt restructuring services to the Zambian government.
Mr Hichilema said the US$5 million to be paid to the French firm should instead be given to Zambian for youths and women empowerment programmes.
Below is Mr Hichilema’s statement
PRESS STATEMENT
29th May 2020
Give the $5 million to the youth and women empowerment programmes, we can restructure the debt for free
As stakeholders in the Zambian economy, our offer for free advice to the PF government on debt management and other economic management issues still stands. Our free consultation will save our meager resources. It is not prudent and morally right to seek $2.5 million from ‘foreign investors’ to invest in mining our gold resources and, at the same time, pay a foreign firm $5.0 million for advice that could be freely obtained.
Our advice to PF since 2012 on issues of debt has been as follows:
(i) Stop unplanned and excessive borrowing, lest debt levels become unsustainable
(ii) We need to have a plan for the repayment of the enormous debt
(iii) The sinking fund set for debt repayment needs to be adequately funded. We have also called on the Ministry of Finance to reign in commitments by line ministries that are not aligned with fiscal consolidation and undermine any efforts to attain internal coherency in debt management. Unfortunately, PF’s usual response was that there’s no need to worry about the government’s debt load, and the UPND are just bitter.
Like they say, you cannot manage an economy through propaganda or rigging. WE KNOW WE WERE RIGHT. Our first 10-year Eurobond was issued with a 5.625 percent yield in 2012, and nine years later, the yield has increased to over 50 percent. What this means is that our Eurobond is JUNK.
We have failed to inspire confidence among bondholders, who have now priced in an increased likelihood of a sovereign default. The seriousness of the situation has been confirmed by PF’s intensions to pay Lazard Freres to give them advice they have been receiving since 2012 from ourselves and others.
Our advice to PF is as follows:
As the country seeks to change the maturity dates, reduce the principal amount of debt (mostly on bilateral debt) and reduce the interest rate on the debt (coupon adjustment on the Eurobond) or MERELY PUT RESTRUCTURE OUR DEBT. A successful debt restructuring exercise that is rapidly executed and provides enough debt relief is contingent on taking steps to immediately restore debt sustainability and rebuild the collapsed economy. This will create confidence among creditors and, more importantly, the citizens, who are the principal builders of the Zambian economy, and ultimately have to repay this debt load in one form or another.
Further, any debt restructuring must be underwritten by the strong political will to stay the course and implement a sound economic program as a guarantee that the exercise will be of mutual benefit to both borrowers and lenders in the longer term.
We are confident that several of our official bilateral creditors and some private lenders in the Institute of International Finance would be amenable to engage under such guarantees.
Our high-level advice is that with immediate effect, strengthen oversight and overall framework for debt procurement, monitoring, and reporting. The changes in Bill 10, to weaken the oversight role of Parliament, do not help in these matters. For now, the role of the Minister of Finance in debt procurement, we will leave it as the issue is in court. On the overall framework, all the contracts that you signed must become public knowledge – transparency and accountability are a hallmark of good governance, which is crucial to rebuilding the economy and getting the confidence of your creditors.
Fully disclosing our borrowings will qualify Zambia for the suspension of debt service offered by G20 countries and other forms of external assistance that would improve cashflows for a robust COVID-19 response and economic recovery. Debt procurement on non-concessional terms or market rates must stop. You cannot have a situation where on paper, the government commits to have stopped contracting new loans, while some Ministers are busy procuring debt. Again, we stress that the Ministry of Finance must reign in such behavior. This not only undermines the credibility of the overall system but also confirms the lack of overall leadership in coordinating matters of the economy.
In rebuilding the economy, we can engage fully, and we shall provide the advice we have been giving you the last nine years. We have one Zambia and no other country to run to. Together we can.
Hence give the $5 million to the youth and women empowerment programmes, we can restructure the debt for the benefit of our citizens for free.
Hakainde Hichilema
UPND President
Very sound advice. Love you or hate you, you appear more competent than these guys in government who are completely lost
I’ve already said my quota on the Noel Nkhoma story, you’re just a fraud. When we say we’ll kick out Edgar next year through the ballot we don’t mean that we’ll install good for nothing criminals like you and your tribal party. 12 yrs of employment doesn’t make you an international expert. Just tell your masters that we can see through you
At least finally you agree that Edgar is a mess of a president.
Thanks HH, continue giving advice. Advice ni mahala. When you come in, come and assemble a very competent team of brains, this quagmire we are in is not easy, the reckless chinampofu borrowing has done a lot of damage to this country, MMD was by far even better, no comparison at all, we are worse off now, with this PF government unless you are too blind to see or pretending
I dont think you are a Zambian my friend.Probably you are foreigner…
That’s my Bally and your Bally advising you. He warned us and we never listened. Look where we are today.
My vote is yours sir.
PF must go!
@ ayatoIle … dont think you are a Zambian my friend.Probably you are foreigner…
P.F R@ts WON’T take up this offer.
P.F & Monday (Red Labia) -Chanda would rather Zambia burns into oblivion, than let H.H help & let them see the folly of their filthy ways.
Meantime #P.F.KUYABEBELE!
Inflation now 16.6%, reserves depleted, exchange rate at K18.50(even appearing normal now), mealie meal price beyond the reach of many ordinary Zambians, agro dealers not paid, domestic debt at over 20 billion and you are paying 2,5 billion, IMF is not even willing to bail you out because you are in deeper waters, governance a complete failure – just chocking opposition, No jobs anywhere, no user friendly incentives to start a business. ZNBC is yours as PF, NO shame that this is supposed to be a public broadcaster and should cover others, very backward thinking indeed. I am a non partisan guy but completed disgusted by the state of affairs, FOR THE FIRST TIME I AM VOTING IN 2021
Who ever insists on Paying those bululu for herve Renard nishi alelyamo
Bayenda aba, ulendo ulipo. I am looking for a party to join, I will start scrutinizing all manifestos and I will check which party has a practical manifesto, I also know that it will require upto 4 years or more to sort out the mess created by the outgoing party. And also a suggestion, is it possible to ask them to surrender their passports so that when the change happens we can have them here and ask a few questions
Big no to the Fake economist
People are wallowing in poverty and your 5 senses tell you to buy a fire tender at 1 million dollars and the country elected you to guide your subordinates in cabinet. What makes you think you can change our fortunes in 2021. And HH, Thanks for the advice which will definitely fall on very deaf ears
Here is patriotism demonstrated by HH in advising PF government on how to approach the debt restructuring models that have been employed elsewhere both at national and corporate levels. The crucial ingredient in this process is discipline. In seeking to restructure, there is need to cease further borrowing which is what HH has stated clearly that a political will is to be in place for debt procuring, debt monitoring and reporting. As a government PF can not be procuring further debt by various ministries when ministry of finance should be the framework with which to approach creditors. This free for all approach has made Zambia accrue huge debts some of which its corresponding applications can hardly be identified. Funds an accounted but increased national debt. If HH has offered free…
services to restracure the national debt, let PF government engage him or at least become part of the team to manage the debt issue than contracting a foreign company paying $5 million increasing the debt further.
In case Zambians missed this ‘Debt Crisis Issue’. The Zambian government has no money to pay the external debt, that is, $11 billion it borrowed from Shylocks (Eurobond) in Europe and China. So, the PF government has contracted a French Company called Lizard to go and ask the lenders to wait temporarily for their money. The owners of the money owed were are supposed to receive it by 2022. But Lizard will negotiate that instead receive it in 2024 or some other time in future. This is the only job they will do but will be paid $5 million. A further debt to be repaid.
It is from this back ground that HH is offering services to negotiate free on behalf of Zambian government.
We were surely better under the thieving MMD regime. In 2011, we jumped from the frying pan into the fire. Under Lungu, we have moved from the red flame to the blue flame.
May not agree entirely with GRZ paying $5m but what HH is doing a merely politicking and taking advantage of people’s ignorance. Folks this is called consulting, consultants don’t necessarily do the job infact they don’t. They let you do the job with advice here and there and what you really pay for is not exactly the job but their signature at the end of the report. Those that work in industry know this and so does HH but he won’t tell you that even if GRZ accepted his services those Zambia owes want their own kind to certify that the numbers are authentic.
@Pakudya Salimbana
Did you not know that HH is a politician? What else do you expect him to be doing????
Wake up if you still sleeping
What a clown!! Advising a govt. on social media yet you order your party’s mps to walk out of a constitutional governance institution, the Legislature?? Bally, you are a twit, exsay….
@THE ENGINEER. Am well awake, thank you, its actually just about 14hours in Mother Zambia. Thank you for seeing my point.
Zambian Citizen – Instead of throwing insults what do you propose to do…I mean you are happy to pay a foreign company of French musungus to tell you the obvious if an African diaspora came to offer you that advise at the selfsame fee you would refuse vehemently . Now look at your compromised mindset ..you only want your people to bootlick you, why didnt you go to that Russian fat boy at EAZ…you want help when you have eaten everything when MMD left reserves and good credit rating you were on a spending spree and loan binge today you have shamelessly turned your own people into slaves and chola boys for the Chinks. Who is the bigger clown between this Hakinde who was advising you in 2012 not to borrow reckless and Lazy Lungu who is oblivious to the problem. Rwanda called in Dambisa…
The only thing here is that 2021 these PF thieves must go please Zambians next year vote with your brain not your stomach if they bribe you with money or food to vote for them take and eat their money but don’t give them your vote finish try to think for the future of your children when voting it’s not about you but the future it’s not about tribe but the future.
Dununa reverse for sure scandal after scandal scandal after scandal scandal after scandal scandal after scandal scandal after scandal.
BALLY’s economic forecasting prowess is just awesome, remember he has been giving free economic advise since 2012 and some people went to the extent of calling him bitter. some people mistook his economic forecasting acumen as wishing doom the country, frankly speaking if you are a businessman and lack business and economic forecasting skills then you will end up paying lizards to help you manage your debts in future.
Economic forecasting is the process of attempting to predict the future condition of the economy using a combination of widely followed indicators. Government officials and business managers use economic forecasts to determine fiscal and monetary policies and plan future operating activities.
My people are perishing because of the lack of knoledge , They can’t listen to you sir pantu fipumbu
PF kuya bebele.
I can even s@t@n1sm in HH’s face. Give him an opportunity, HH will have another opportunity to steal.
Where did it all go wrong for PF. Had they bought the fire trucks at $350,000 instead of 1million dollars they would save 27.3 million dollars that could have been wisely invested in something that would generate more money for them. How much more have they wasted on exorbitant road prices and ambulances and toll plazas?. Time to reckon always comes and this is it for PF.
Next they will be paying someone 5 million to come and rule the country since they have failed.
Tarino Orange – You got those billions from muzungus and so they will only listen to fellow muzungus when you are in trouble. Forget about local experts – they can come up with the best solution but it will just be trashed until you use one of them.
Use GBM to negotiate
Donchi kubeba , bally will fix it!
If Zambians have skills to restructure our debt for free why are we paying a Foreign Advisory Firm $5 million? Bally is a qualified and experienced Financial Advisor. Bally can form a consortium of Local Financial Advisors and get the job done for free and within a year. We are always crying out for “buy Zambian product” first. Our Moto should be “Zambian First”. The Govt should listen and hire local skills and Professionals to Restructure our Debt at a lower cost and in local currency. The Govt should re-consider this matter.
I wouldnt trust Bally the Trible HH anywhere near the national treasury.
Dr Bwalya Ng’andu will fix it for us. Please dont disappoint us Dr Ng’andu, we count on you.
And besides, Bally Trible HH still owes us some explanation, what did Sejani say in 2006 and why did he make you president of Trible upnd? That will not go away Bally, so better come clean if you want a go at 2021.
Mr Hichilema if u really love your country Zambia, as a receivers of Luanshya Mine during Privatisation your firm received about USD 12 million and today you want to tell the Zambian people that you can offer consultancy service for free??? Come on you know deep down your heart why an international consultants has been engaged. Dont lie to us that you can manage this work.
where is kz?