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Alba Iulia
Wednesday, July 21, 2021

It’s very easy to condemn the debt swap when you are not a beneficiary

Economy It's very easy to condemn the debt swap when you are...

By Lubinda Haabazoka.

It is very easy to condemn the debt swap especially when you are not a beneficiary.

What is funny is that those that are condemning the debt swap are the ones in the forefront preaching on how life is difficult.

The debt swap should not come as a surprise because such negotiations started last year when Covid hit! It’s just that we were either busy politicking or commenting on other scandals but cabinet office announced this intervention last year!

The President of Zambia last week highlighted the various interventions he put in place to cushion the economy from the negative effects of Covid 19 as follows:

  1. created the K10bn medium-term financing facility to help companies refinance loans gotten before Covid. Loan repayment have favorable conditions with a moratorium of one year on repayments. This move prevented a banking crisis caused by liquidity problems arising from massive loan defaults under Covid conditions. This move was some form of debt swap but for companies.
  2. Government also issued an k8bn bond that saw arrears paid to suppliers of government goods and services. This move injected liquidity into the economy. Note that such an intervention occurred without printing money unlike in other countries where printers were switched on to fund their citizens.
  3. Then government moved in to help the vulnerable population. Government increased the number of social cash transfer recipients to over 925,000 people across the country. This is no mean achievement for an African country. Zambia remains one of the few African countries to pay its vulnerable people.
  4. Then government under DMMU escalated the food security packs with GRZ feeding 1.7m Zambians at the peak of the program. Today, 1.3m Zambians benefit from food security packs made available by GRZ. This is no mean achievement for any government in the world.
  5. So now government has moved in to provide relief to the hard working population starting with its own employees I.e civil servants. The debt swap will definitely free up resources for indebted employees. The only person that can condemn this is one who doesn’t relate to the challenges on the ground amid the Covid 19 pandemic.

In conclusion, if I was a political player, I would commend government for these interventions and propose more of such interventions once elected instead of saying when elected we shall do away with social cash transfer because it’s costly. People being helped under social cash transfer are also Zambians and should therefore be helped by their government. When you remove social cash transfer where shall you take the over 925,000 Zambians benefiting? Let’s have a human heart here.

To also say debt swap is politicking is unfair because this intervention started last year. To say this is bad is more like telling an employee that please continue carrying the debt burden. For me, it’s what you promise me that matters and not what you condemn.

11 COMMENTS

  1. You are a useless economist. The knowledge you have is good for the growth of one family economy not the the economy of the nation.

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  2. What sort of economist is this chap? Why cant he argue using economic fundamentals as opposed to cadre reasoning. Iam really disappointed with this chap. He reinforces my believe that Russia has dual education systems. One for Russians and the other for third world students where they pass them all and give them questionable PhD’s

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  3. The PF has really tried to help the people.. some times they have done it wrongly but you can tell where their heart is. Old women and men receiving little cash just to push them ….. With this they will get more votes… Most villagers don’t want even to hear That lungu should go. He will get more votes than before in the rural areas. Thumbs up

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  4. Does debt swap end the employee and bank relationship or can someone still go back to the bank after debt swap? If civil servants will still go back to the bank as need arises, then this is a big problem as this may cause an imbalance. if the relationship does not continue, then how will these servants access loans, especially those that still want to access loans now? How accessible will these loans be from the new lender? How favourable are the interest rates compared to banks and will they be as easy to get as it has been where cash is delivered to their door steps? Who is going to determine the number of instalments as some do not like long term deductions? Finally how well staffed is the new lender to handle all such loans volume?

  5. Iwe P.M, Mr. Haabazoka is trying to explain in simple way for all to get sense. If he starts explaining in terms of Econometrics models will you pick anything?

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  6. Most of these ‘measures’ are unsustainable in this weak economy. The number of people supported is not even as high as claimed here. There are loads of unemployed people who don’t get anything. The country does not produce much of value goods – without industries and with the government extravagant spends for it’s officials, including the numerous misappropriation of funds reported in the latest FIC report, there will soon be nothing in the coffers again. The 8bn kwacha bond is a borrowing that will need to be paid back. In short, these are piecemeal tokens, not for the long haul or an investment. The so-called debt swap, as with other latest ‘development’ announcements, have all just been timed to coincide with nearer to the elections. To hoodwink.

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  7. @Redo
    HH has been winning the rural vote hands down in the last 2 Presidential elections. You want Lungu to get the rural vote now cause he a total failure among the urban voters.
    PF want to rig the rural vote. It wont work bwana

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  8. We know that debt swap is political because you are taking advantage of people being ignorant on the terminology. Please if you are a serious then explain what gains one can get from swapping a debt? Why are you not emphasising on why these people got into debt in the first place? If you pay people on time, they are less likely to borrow money to make ends meet. Why didn’t you publicise this earlier if this is not politics?

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