The government says the debt swap will provide significant relief to public service workers who are highly indebted and with the compromised capacity to service the loans.
Information and Broadcasting Services Permanent Secretary Amos Malupenga says the government is convinced that the debt swap will take away the pressure civil servants have had to endure in paying back their debtors which in some cases has affected their performance in carrying out their duties.
Speaking to the media in Lusaka this morning, Mr Malupenga said the idea was arrived at with the unions after thorough research into the matter.
He said that the debt swap, as an addendum to the collective agreement between public-sector unions and government, is an idea that was hatched three years ago but could not be implemented due to financial implications.
“This matter has been under discussion for over three years and a lot of work had to be done in the background. Implementation was delayed because of the financial implications. A lot of work had to be done in the background to ensure that this succeeds,” said Mr. Malupenga.
Mr. Malupenga also explained that the three-month suspension of deductions from civil servants’ salaries will allow for the reconciliation of records to establish what exactly is owed by the employees.
He said this will enable the government to reconcile the records and to determine what exactly is owed so as to come up with a roadmap to offset the debts.
“It must be understood that during this period the Public Service Microfinance Company will also look at what each employee owes and propose a flexible manner in which the debt they will take over will be repaid by the affected employees. This is like an in-house arrangement,” he said.
The Permanent Secretary stated that once all the processes are completed, deductions will then resume but under the Public Service Microfinance Company.
Mr. Malupenga dismissed views that the debt swap is connected to the forth coming general elections but instead noted that the debt swap is a well-intended initiative between the public sector unions and government.
Mr. Malupenga has since called upon various public service union officials, who brought the proposal to government, to explain the idea to their members to avoid speculation and misinformation.