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Alba Iulia
Wednesday, September 22, 2021

The debt swap exercise is cost neutral to government, says Secretary to the Treasury Fredson Yamba

Economy The debt swap exercise is cost neutral to government, says Secretary to...

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

9 COMMENTS

  1. Its not an added cost because you have not being paying the banks what you have been deducting from civil servants’ pay.

  2. Thank you for setting the record straight. Fi upnd diasporan stop being jealous. After all you are all broke there abroad living off government support

  3. If that is the case, how come government is able to find money to pay the lenders but could not pay the employees? How can it be ‘cost neutral’ when government is taking on the management and administration of debt to which it was not party? Debt is not just the cash that is owed. It takes manpower and other resources- computers, software, electricity etc to manage. That is why the lenders include ‘administration fees’ in the formula. I fear that if the people who are in charge of our national finances do not understand these things, it explains why the country is in such a mess.

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  4. It is a plot to win votes. A political move that does not have an impact on debt except postponing a payment means more interest down the road but an average person will gladly accept this election plot. I think this may win Lungu votes. But here is how UPND could do to change the game. How about 6 months Morotorium and only pay interest after six months on loans until economy is back to full employment. They can also say we will negotiate with lenders to bring interest on loans down in return give them a tax incentive to help civil servants. But being quiet by UPND is a lose situation.

  5. Bargaining Unit has met it’s goals. This is and shall eminently empower and motivate the civil service on the basis of I OWE YOU! YOU OWE ME!
    Let’s proceed.
    VIVA ZNUT
    VIVA EMPLOYER
    VIVA INDUSTRIAL HARMONY.

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  6. Is it a co incident that this idea of
    Debt swap has come at a time when we are few weeks from elections. Or is it a way of campaigning?

  7. This must be voodoo Accounting. How can the so called Debt Swap be cost neutral when the Govt withheld Civil Servants Deduction Remittances to the Lending Institutions and didn’t pay Civil Servants Allowances Arrears? Dr Yamba is messing himself by joining this Creative Accounting Scam. The Swap cannot be neutral becoz the Govt owes the Civil Servants and the Lending Institutions. The Govt must pay what is due to the Civil Servants and Lending Institutions.

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