Sunday, June 16, 2024

Habaazoka expresses concern that the $4.3 billion for the budget is going to come from debt


The just-announced 2022 national budget by the United Party for National Development (UPND) government has been described as an ‘ambitious budget’ as it can make the party in government or break it.

In an interview in Lusaka, Lusaka based economist Lubinda Habaazoka said that in as much as it is a formidable budget the party in government should strive to attain it and be able to raise the much-needed revenue, particularly with the first Eurobond due in 2022 and with no concrete pronouncement in the 2022 budget that was made by the finance minister on how the country is going to treat that EURO bond.

Dr. Habaazoka noted that if the government can manage to raise the resources, the country’s economy may improve owing to the fact that there are about 44, 000 jobs to be created.

“First of all the budget is US$10 billion, guaranteed revenue to support the budget is about five billion this can be easily raised if the economic growth remains at the same trajectory and if efficiency in tax collection continues.

“But what is worrying is the other five billion of which about 4.3 billion is going to come from debt. This amount of money is so huge owing to the fact that we already have about US$12.9 billion external debt and if for example, the previous government borrowed about US$11 billion in the last ten years because the MMD government left about one point eight billion, this means that for the year 2022 we shall borrow US$4.3 billion,” he stated.

“And the recruitment of teachers, health workers, and agriculture extension officers is a very welcome move and there are a lot of people that are languishing in the streets, people that are qualified to do jobs who are not engaged in any activities. Kudos to government that they will be creating about 3, 600 jobs every month up to December for us to achieve the 44, 000 figure, which is a very good move, ” he said

He, however, lamented that this is not backed by any strong fundamental shift in the macroeconomic valuables and the growth of the economy.

Dr. Habaazoka indicated that what will happen in the coming years is that these new recruitments are going to add to the wage bill by not less than K2.5 billion and this will have to be born by a very small formal sector of Zambia struggling amidst COVID-19.

He stated that this should not resist the government from recruiting people but that it is something to think about and worry about.


  1. This same guy was telling PF that its ok to borrow. Now he is saying its not okay. If it was ok to borrow and steal why is it not ok to borrow and invest in the economy? When your domestic revenues are far short of even just debt servicing plus public service salaries, where does money for other critical sectors come from?

  2. You can’t win with these PF people. They were braying like donkeys about no jobs created in 3 months, now there are plans for jobs, they bleat like sheep about debt. The simpletons forget they created the mess because of their massive, reckless debt. Their only mission is to have selective amnesia about their role destroying the economy and criticize any efforts to remedy the mess they made. No solution or action is good enough, as long as it’s from UPND.

  3. Indeed there’s info that hasn’t been revealed in the Minister’s pronouncements. My understanding is that there’s a big goodwill from Western lenders and it’s likely that the Eurobond that Habaazoka has talked about will be re-financed. There will also be an increased inflow of donor funds. What I expect is that this goodwill will be at a cost in terms of assets such as the gold at Kasenseli. I also expect those Ugandans at Mumbwa to be displaced by serious gold miners from the West. My worry is that I didn’t hear any pronouncement on regular declaration of Road Tolls and how they’ll be channeled. Only the Matumbo – Chama – Lundazi road was mentioned in passing by Bally, how about other roads that are also in a deplorable condition?

  4. This nigga again.
    What the hell are you talking about here?

    Our debt is in the process of being restructured and you too know this

    Investor sentiment has changed since the election of HH7. Lubinda would have been rubbishing a mediocre PF budget, had they won.

    There is no objectivity in what he is saying.
    Nigga read the Minister’s speach. It’s all on there.

    No matching macroeconomic variables? Seriously nigga! Please stop asking this man Economics questions because he seems not to understand basic economics and most importantly he doesn’t read.

    I have read the Minister’s speech so that I can criticize objectively and not just be yapping.

    It’s no wonder a very section of economists in Zambia want nothing to do with this nigga.

  5. “He, however, lamented that this is not backed by any strong fundamental shift in the macroeconomic valuables and the growth of the economy”.
    This is extremely important observation. This budget is good on paper.
    Guaranteed Cash 50% of budget and in dreams 50% against a big plan called a budget but with no solid indicator and plan of cash inflows couple that with enormous impending mismanagement. An uphill battle. Next, it’s more exposure to national assets stripping through raw deals resulting from skewed FDIs. Politics in Zambia is an enemy to National Development. It was a budget to impress first and analyse later.

  6. It is within Dr. Habaazoka’s right to point out that the UPND government’s budget will depend on borrowing K$4.3 billion to finance it. When in opposition, UNPD talked about PF borrowing recklessly as if the UPND had better ideas of how to finance the budget without borrowing. Multiply $4.3 billion by the first five years of UPND rule, then you would be talking about the external debt escalating to over $20 billion . Dr. Habaazoka also makes a very interesting observation which is that of the $12.9 billion external debt left by the PF, $11 billion was borrowed by the PF itself whilst $1.8 was carried over from the MMD. It should indeed worry any sane Zambian that we have a UPND government that is likely to externally borrow twice as much as the PF borrowed. Only UPND and Bally praise…

    • I’m not an economist but the few things I can contribute towards this topic are 1. HH never said he would not borrow, to the contrary he is on record as having said he would borrow from cheaper sources. 2. He would not borrow for consumption, but as Dr Habazoka also alludes to, but create jobs that will bring returns. In my own thinking, jobs like in the agricultural value chain, manufacturing like in batteries from our manganese, finished copper products like cables and many others. We can also mine our gold on an organized fashion and realize returns. So what makes you think and at the conclusion that we will be borrowing year in and year out to get to the alarming figures you indicate here?

  7. So has this Russian trained moron finally been removed from EAZ Presidency as I dont see that mentioned in the article? If so that is good news…plus he is no position to advise the govt on budget given he is the one who supported PF when they were borrowing recklessly. He has absolutely no shame at all this is a common trait with PF bootlickers.

  8. YES, INDEED, he is “Lusaka based economist” but definitely not a ZAMBIAN Economist.
    I thought he was EAZ President, and EAZ was part of the Budget Consultation groups, that was approached. Did he raise those concerns there and then? Now he is running to the media to alarm people, typical of PF surrogates. ATI , it means government wil borrow US$4.3 billion, FUSEKI…Hypocrite! Go hug Sean Tembo, I am sure he will be coming up with the same rubbish.

  9. I was watching Zambian Face-book online TV BAKWETU on Friday and the guest on the live panel was experienced Lusaka based Economist Trevor Simumba he was asked a similar question and his response was interesting..he said Zambia was now a signatory to some treaty or agreement and in doing so has saved almost half a billion dollars in this budget.

  10. It’s very simple bo Lubinda sha; “ it will come from recovered assets that PF surrogates stole, and you one of them”.

  11. So, actually, that 4.3 billion will come from you, Amos Chanda, Alexander chakwanda, Bowman Lusambo, Kaizer Zulu & Chitalu Chilufya. Any questions?

  12. First off, the government must mend the leaking bucket. You will be amazed how much was being stolen on a regular basis. After that, we do have cooperating partners that were supporting even the previous government whose borrowing you condoned and praised (mukuti it is for infrastructure mwabene). Now we are moving towards improving our human resource starting with schooling and job creation. In between here tikuti we shall also bring sanity to our districts so they don’t have to ask central government to buy sweets… and so on and so forth. Anthony Bwalya has more details ngati mufuna.

  13. The finance minister has directed MPAs (Ministries, Provinces and Agencies) to procure or import goods and services at an exchange rate of K19.7/$ in 2022, K19.9/$ in 2023 and K20.1/$ in 2024. Does this resonate with the campaign message of UPND and exchange rate reduction? Will investor confidence be reducing as we head to 2026? Also how can one make tax deductible from Income before CT. Mineral Royalty tax is like a VAT. Tax at source. Ordinary businesses pay VAT, WHT, Various taxes and don’t deduct from profits before tax. How can one give such an incentive of deducting mineral royalties from PBT. Can that happen in UK or USA? Ask Chinese who have invested in Western countries if they get such incentives. The greatest undoing of UPND economically is the finance minister and bank…

  14. We in pf borrowed for infrastructure development and not for mere consumption to please voters, as we can see from the upnd budget. Our infrastructure development is and will continue being a catalyst for growth and development. Upnd are not a clever bunch

  15. The problem we have with PF bloggers on this thread is they are short-sighted and never watch whole interviews with the President and the Finance Minister…you have heard the President state time and time again that the huge debt left by lazy PF govt will be unbundled…you are also forgetting that with the increase in CDF will mean increase of registered local companies bidding GRZ tenders meaning more revenue for ZRA to capture. It is very difficult to explain all this to someone who has been borrowing for 10 years but never repaid anything and has no fiscal discipline.

  16. @Tarino Orange,
    “…The problem we have with PF bloggers on this thread is they are short-sighted and never watch whole interviews ….”
    Absolutely right !

    And the moment you try to explain, you slapped with a tag, that you are a “UPND”

  17. JAY JAY ” 5

    You are more than that. What good does it do, to call another person a Nigga just to have a louder soundbite, It’s about being Subjective and Objective. If you look at the existence of mankind, especially in the last 300 years, most of the ideas that were presumed wrong ideas are what changed the world.

    The idea of creating a Car, Electricity, Telephone, Airplane were all stupid and spooky ideas to many people. IBM called Bill Gates a lunatic when he proposed MS Dos Operating System he developed for their computers. Yet years later IBM tried it and it worked. Because of that, IBM started selling Desktop Computers and became the first $ Billion Dollar Company in the world. Best to educate and share your wisdom collectively than sink low

  18. 2. The truth of the matter is the Finance Minister who manages our house called Zambia has gone to apply for a Credit Card abroad to sustain the house. Its there in black and white from his budget. This has increased our foreign debt to new levels. We have to work hard, especially in the private sector to create worth and jobs for the present and future governments to repay the loans. Else its going to get worse and worse . This is what he said: MADAM SPEAKER! The taxes we collect are not enough to pay our debt.

    That said we have to give The Finance Ministers credit and kudos for signing a Concessional Loan which is much better than a Market Loan. Concession Loans have generous terms than Market Loans.

  19. 3. Investor Confidence has to be backed by performance. We cannot not just count on Investor Confidence without doing better on Performance. If look you at various IRS Capital Markets Indicators that went up by fractions when HH came to power due Investor Confidence, they have gone down because now foreign investors are looking deeper on what HH “says” and “does.” Plus the private sector as a whole. It’s the private sector that counts most, as that’s were the money is going to come from for the government to collect taxes and repair loans.

    In life, INTENTION simply just sets the JOURNEY, you still have to make the JOURNEY. So Investor Confidence has to be backed up from both the government and private sector.

    Enjoy The Day…..

  20. INDEPENDENT OBSERVER,,,,22, 23,24 Like I have said before, keep away from the affairs of Zambia. You f*ckin had it easy. You buy yourself 1700 Bitcoins at $15 each and eight years later you sell them at $30,000 each and make $50m, now you think can come to lusakatimes to advise people about creating wealth and all this private sector sh*t. Go f*ck yourself man. Stay there in UK & USA with your employers Goldman Sachs who the biggest evils of this world. We know you and read your comments on ADFN.COM

  21. Ba JAY JAY @ 5

    Why are you behaving like a child and you called yourself an Economist yesterday. You are saying blah blah blah… I read the budget.
    What makes you think that you are the only person who managed to read the budget. Its there and we have read it too and its
    was written so that a common person can read not a selected few who tell lies that they are economist.
    Judging by your comments one can easily say you are telling lies. You are not an economist as you have failed
    to argue intellectually.

    My brother, you bet and word up. Your calmness & wisdom is always appreciated.
    A person who insults, abuses, exploits, demeans and degrades another human being tells the world how unhappy, sad and miserable they are.
    We live in a world where we will not agree with other people every day. But to resolve to vulgar language proves
    that we are the ones with problems and not the person we are attacking. May god bless you my brother.

  23. INDEPENDENT OBSERVER – Where do you think GRZ is going to get cover in the short term? I dont understand you bloggers surely the last govt was deducting half the budget to debt servicing and civil service salaries leaving zero for frontline services..a concessional loan is by definition “…are loans that are extended on terms substantially more generous than market loans. The concessionality is achieved either through interest rates below those available on the market or by grace periods, or a combination of these. Concessional loans typically have long grace periods”. There is also the IMF which also offers you low interest loan with conditions of course…I mean what other option is there. You seem to forget that PF left a crippled economy and didnt have any solution if they won the…

  24. Dr Habazokas concerns are genuine, better Zambians consider carefully what he is saying and don’t look at them from a political point of view but see them as Zambian problems.
    Borrowing as it has always been condemned by the now the party in government, the negativity of borrowing is not going away with the PF government, from the look of things if UPND starts with 4billion dollar in its first one year it will borrow 20billion dollars by their end of their first five years.
    I don’t that this borrowing is any better than the borrowing of PF government who only borrowed 11billion dollars in ten years, if someone is thinking that the UPND 20billion dollar borrowed money five is less than the PF 11billion dollar borrowed in 10years .
    There could be some one mad somewhere who…

  25. This PF cadre who tried getting a job by hero worshipping everything that PF did under the guise of unknown EAZ. But now just the first budget under upnd he has to criticize everything. It’s time we got rid of such organizations headed by cadres.

  26. Tarino orange #28

    1. Sure, your question is very valid. The government has no choice but to go and borrow more to keep the nation afloat. I am not sure if you have followed what I have advocated over the past years. And that is – to tap into our potentials as private citizens to become Wealth Creators, Entrepreneurs & grow the Private Sector. In you don’t take risks in life, you cannot win or succeed. All governments make policies some work, some don’t work, but you learn from them, become wiser and be honest to the people

  27. 2. In as much I might not agree with HH on some subject matters, I also know that he is more knowledgeable about making investments than Lungu. I criticised MMD & PF and folks hated me in both parties. And I have never been a member of both parties If we don’t become creative minds and grow the private sector, we will keep being slaves to IMF, World Bank & Donating Nations

  28. 3. All previous government have failed to stimulate & inspire the private sector. We depended too much on copper for many years and when the copper price went down, we got a rude awakening. Parastatals companies were good things, but they were run by political appointees who had no inkling about running business apart from praising KK. They, parastatals; became a source where political ruling parties went to draw money without paying back.

  29. 4.UNIP was not good at encouraging Zambians to become entrepreneurs. KK did not want Rich & Powerful Zambian Businesspeople in Zambia. MMD & PF all failed to support the private sectors. All previous budgets have mostly been about pleasing the voters. Budgets have sounded good by finance ministers but most of the things do not come to pass, but left to die in government filing cabinets.

  30. 5. In nutshell, what I am saying is let takes good, calculated risks to grow the private sector. If we do that, we will have abundance of tax collections that will improve the public sectors and pay loans. Zambian politicians have a culture of hating and pulling strings to pull down individuals in the private sectors who become successful business personalities. Instead of encouraging you to grow big, they shoot you down. I guess Power Is Sweet. Unfortunately, this culture is also on Lusakatimes if you read some of the comments every week.

    You, Myself and other Descent Zambians all what that which is good for Zambia. And that’s a BEAUTIFUL COMMON DENOMINATOR to have. It means wishing good to everyone and seeing the nation progress.

    Enjoy The Evening

  31. What UPND is doing is exactly what it condemned, yet their predecessors borrowed to build infrastructures we can all see, but the borrowing by this new government is just for consumption, what manner of hypocrisy with this government.
    This corruption is the worst of its kind.
    Really disappointed with this new dawn leadership they are liers in what they are doing now.
    This new government is playing on the emotions of people, but will end up in tears mark my words.

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