Secretary to the Treasury Fredson Yamba says the debt swap exercise is cost neutral to government because it will not be an added cost to government business.
Speaking when he visited the Payroll Management and Establishment Control (PMEC) Mr Yamba said the exercise of debt swap is a way of payment of arrears owed to public workers in form of leave travel benefits, salary arrears and other fringe benefits.
Mr Yamba said the benefits are part of civil servant conditions of service that have not been settled by government, despite being earned, resulting into arrears owed to them.
He also noted that debt swap is a program where government pays what the civil servants owe to the banks only to the extent that the workers are owing government.
Mr Yamba further stated that the reconciliation will take a maximum of 3 months, after which the actual amounts involved will be ascertained.
“The actual amounts involved in the exercise are yet to be determined as the reconciliation exercise is still on-going,” he said.
“The exercise will be cost neutral to Government as the amounts will be offset against what the government is owing civil servants,”.
He added that the exercise is cost neutral to government and is not an entirely new concept, because government has undertaken such transactions with utility companies and Zambia Revenue Authority (ZRA).
He said the only difference now is that rather than swapping with companies, this exercise is focused on individuals but still remains in line with the debt dismantling strategy.
“The amounts for payment of arrears are already budgeted for and it has been the advice of multilateral institutions that government should reduce on accruing arrears,” he said.
“This then is just one way of liquidating what is owed to employees of the government,”.
Mr Yamba also took the opportunity to demonstrate how the debt-swap initiative has been effected and to illustrate resultant increase in take-home salaries, in many cases.
And Permanent Secretary Public Service Management Division (PSMD) Boniface Chimbwali confirmed that the debt-swap initiative has been implemented for the July 2021 salaries to be paid next week.
The Secretary to the the Treasury, was accompanied by Accountant General Mr Kennedy Musonda,Permanent Secretary Ministry of Information and Broadcasting Services Amos Malupenga and Permanent Secretary Public Service Management Division (PSMD) Boniface Chimbwali during his visit to PMEC.
Meanwhile Representatives from various Civil Service Trade Unions were part of the entourage to PMEC