Respected Former Bank of Zambia Governor Caleb Fundanga has raised serious concerns over the country’s worsening debt situation.
In his latest paper titled, “Fit for Purpose? An Analysis of Zambia’s Medium-Term Debt Management Strategy, Dr Fundanga observed the three Eurobonds have completely reversed the country’s almost debt free status attained before 2011.
Dr Fundanga noted that Zambia was one of the countries that benefitted from the Highly Indebted Poor Countries (HIPC) and Multilateral Debt Relief (MDR) Initiatives noting that these initiatives left the country almost debt free.
He however observed that in recent years, the Zambian debt situation has completely reversed.
Dr Fundanga stated that with a debt stock of 18.9 percent of GDP in 2011 Zambia’s debt stock grew to 56.3 percent by 2015.
“This very rapid increase has occurred since 2012 due to the issuance of Eurobonds; US$750 million in 2012, US$1 billion in 2014 and US1.25 billion in 2015. The rapid increase in debt has translated into huge annual debt service payments; from US$34.14 million in 2011 to US$484 million in 2016,” he wrote.
Dr Fundanga observed that the domestic debt situation has been equally bad.
“This debt, mainly contracted through issuance of Treasury Bills and Bonds, has grown from ZMK11 billion in 2011 to ZMK33 billion in 2015 with resultant composite yield rates for Bonds rising from 15 percent in 2011 to 25 percent in 2015 whilst Treasury Bills rose from 11 per cent in 2011 to 24 per cent in 2015. When domestic arrears are added to this, domestic debt stock in 2016 stood at ZMK 51.8 billion – with arrears representing 36 per cent of domestic debt.”
The Former Central Bank Chief stated that the PF government has been using debt to drive growth.
He however noted that redemption of any debt works much better if the proceeds of the borrowed money are invested in productive sectors of the economy.
“In the case of Zambia a large portion of the loans went into expansion of public administration such as the establishment of a new province and new districts. Each of these led to employment of more public servants and increases in other related costs. A number of roads were also constructed, but these were at very high costs. Together this spending has not resulted in significant economic growth, or a larger tax base. This makes redemption of loans much harder,” he stated.
Dr Fundanga has however applauded government’s initiative to launch Zambia’s first Medium Term Debt Management Strategy (MTDMS) paper to cover the period 2017-2019.
He noted that a MTDMS is a document designed to help a government implement sound debt management for a period of between three to five years.
According to the World Bank and IMF, who have developed a tool for formulating MTDMS, the primary aim of debt management is to raise the amount of funding required by a country at the lowest possible cost over the medium to long-term, consistent with a prudent degree of risk.
The strategy should be such that it promotes macro-financial stability and financial sector development.
On domestic debt, Dr Fundanga stated that at 36% of Domestic Debt Zambia’s payment arrears are one of the highest in sub-Saharan Africa and reflect poor public financial management and that the huge arrears also reflect a lack of budget discipline.
He noted that the failure to pay suppliers to government negatively affects economic performance as these suppliers also fail to pay those who supply them with goods, including payment of salaries and wages to employees.
Dr Fundanga said payment arrears result in costlier procurement for government as the suppliers factor in delayed payment into price quotations.
“Payment arrears are also a source of corruption as supplies devise various approaches to exit the payment pipeline. The MTDMS could provide more clarity on the Government’s arrears strategy,” he wrote.
And on Eurobond redemption plans, Dr Fundanga said the MTDMS does not provide a concrete plan on how Zambia’s significant Eurobond debt will be redeemed.
“Recent statements from senior government officials have suggested two possible approaches; the first is establishing a sinking fund and the second is the refinancing of maturing bonds with longer dates bonds at a more favourable rate. A sinking fund would have worked better if established immediately at the time of issue of the first bond because annual outlays into the fund would have been modest.”
He observed that re-financing may be a better option at this time, but is subject to the vagaries of international debt markets.
Dr Fundanga charged that the MTDMS was a missed opportunity to offer the markets and international bodies clarity on the Government’s approach to redeeming the Eurobonds.
On controlling the acquisition of New Debt, Dr Fundanga said fiscal consolidation, or strong policies to reduce deficits and accumulation of debt stock, and measures to enhance revenue collection were expected to feature prominently in the MTDMS, but they are not present.
He stated that budget discipline as well as measures to deal with loss making parastatals are central features of fiscal consolidation and prudent debt management.
“While the charging of cost reflective electricity tariffs, removal of fuel subsidies and removal of some agricultural input subsidies have been undertaken by the government, there are still a number of loss making parastatals remaining and these are the same entities responsible for government contingent liabilities (which the MTDMS is silent on, but are classed as public debt by the IMF and international bodies). For Zambia what is particularly worrisome is the increasing number of parastatals being established by the industrial Development Corporation (IDC) including the establishment of a national airline, most likely, with borrowed funds,” he said.
Dr Fundanga said the MTDMS should encompass plans to manage these loans, but at the moment it does not.
He suggested that in addition to ensure Parliamentary oversight in the contraction of new loans the government should facilitate for the enactment of the Public Finance Act.
Dr Fundanga observed that such a law would ensure that no new loans can be contracted without the approval of parliament.
“Despite these potential gaps the MTDMS is a huge step forward and presents a welcome move by the Government in tackling the rising debt challenge. But the MTDMS can only be a success if the capacity, capability and resources are in place to implement the MTDMS. Good debt management requires that the National Debt Office is well staffed. Zambia requires well qualified officers to facilitate the segregation of front, middle and back offices. Further debt office staff should be professional enough to be able to tell the Government when its borrowing is excessive.”
The truth from Dr Fundanga and knives will be out from sycophants like BR Mumba and his smart fimo fimo theories.Let us be realistic, that is the only way we will be able to put our economy on the right track
Mr Fundanga if technocrats can work independent of politicians maybe we can do better but they all behave like politicians.
The problem when politicians have hands on national money. We have put ourselves in this mess by borrowing and investing majority of it in pockets of a few selfish individuals. Instead of using money for good purposes that will ensure that money comes back to the government.
On point, borrowing to create new districts and 3 quarters of none economic roads while neglecting the real roads that drive the economy such as the great North road Chinsali to Nakonde. Euro bonds to be honest was mainly for campaigns and it doesn’t matter what anybody says it’s a fact otherwise where did it all go ?? For even the roads are separate loans from the Chinese EXIM bank
Ignore this man
What’s the worst that can happen ?
Nothing.
Thanks
BB2014,2016
And bury our heads in the sand..?
I love Dr. Fundanga … a great technocrat with all the solutions needed to move the ball not the usual yapping loop sided articles we are used to at LT. I was the first to explain here that the sinking fund should have been the first thing Ba Chikwanda put in place.
And when I encouraged Felix to seriously focus on refinancing some people said I was suggesting that because I wanted a cut in the commission even though I could do that for zero commission for my country any time any day.
Dr. Fundanga has just reiterated that with several other items we have alluded to. However, I differ with Doc on classifying a national airline investment as part of contingent liabilities for two reasons.
Firstly, usually contingent liabilities both for underwriting and debt servicing reasons are…
Continued…
Firstly, usually contingent liabilities both for underwriting and debt servicing reasons are liquidations within a 12 month period. We don’t expect those capital outflows to be serviced in that shorter period.
Secondly, unless he is considering the total capital structure of IDC as an aggregate amount, stand alone the Zambia Airways capital stake starts at a parity $40M, that’s lower than the $100M we just spent on fighting Cholera alone.
I must add that the Cholera fight was a sunk cost at $100M while the $40M will immediately be revenue generating in all aspects be it income tax from employee, new taxes on ticket sales, airport tax, etc including improving the balance of payment current account in that ticket sales by Zambia Airways will not need remittances in…
Continued….
…. including improving the balance of payment current account in that ticket sales by Zambia Airways will not need remittances in foreign currencies to other carriers.
That’s the only part where I can see Doc had a blind spot with. The other point is actually the heading of this this article. It seems to suggest that the Euro Bonds pushed us into a distressed position.
They did not, the ratio of domestic debt compared to that of the Euro Bonds is actually higher but the advantages are in refinancing the Euro Bond which has a market with such possibilities while domestic debt does not.
So, in terms of debt and risk management, it’s safe to say once we refinance the Euro Bonds for say 30 year maturities with lower coupon rates, our debt servicing will…
Continued…
So, in terms of debt and risk management, it’s safe to say once we refinance the Euro Bonds for say 30 year maturities with lower coupon rates, our debt servicing will significantly drop while the principal remains the same on both domestic and foreign debt but the servicing pressure and risk of default would be gone.
Now Zambia overall has a bigger GDP than even certain European countries such as Estonia, Iceland, Cyprus, Bosnia & Herzegovina including 5 smaller ones.
This means that our economy when properly diversified can handle the current debt stock and even rebound faster than these European nations I listed.
Overall … great penship from Fundanga, one of the greatest patriot I ever met. Both the President and Margaret need to keep him very close to their…
Continued…
Both the President and Margaret need to keep him very close to their ears. A repertoire of wisdom and knowledge, he is.
Thanks a trillion once more, Doc … you’re one of the smartest people the Zambian Enterprise ever produced.
God speed …
And back to Zambia Airways … the aviation industry in Zambia is worth $1.5 Billion. That’s 6% of our nominal GDP but with our own airline, we can immediately start going the tourism as well as the cargo freight sectors. We can keep the majority of that cash by not remitting forex to other carriers.
Current estimates show that if done properly, we can double this the aviation sector alone as we envision creating a hub. Total passenger traffic stands at 5 million but with Copperbelt International, Harry Mwaang Nkumbula’s renovations and Kenneth Kaunda’s new terminal we can easily double that traffic.
The direct beneficiary? The new Zambia Airways … by the way I took Jay Jay’s advise. I am flying back to Geneva from Spain on easyjet today. One way ticket price? $67.00!!!!…
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… by the way I took Jay Jay’s advise. I am flying back to Geneva, Switzerland from Granada, Spain on easyjet today. One way ticket price? $67.00!!!! Compare that to $650 I paid SAA at same short notice for one way from Lusaka to Johannesburg traveling almost the same distance of 800 miles last November.
Zambia Airways can drive SAA out of business, they are flying 5 times a day between Lusaka and Johannesburg at an exorbitant prices. We can cut into their market … if fact, the Lusaka Johannesburg route for the new Zambia Airways should be the low hanging fruit to initially exploit.
Ba Brian Mushimba … please faka speed on this Zambia Airways thing. Did I mention that all those small European countries I mentioned with smaller economies than ours have their…
Continued …
Ba Brian Mushimba … please faka speed on this Zambia Airways thing. Did I mention that all those small European countries I mentioned with smaller economies than ours have their own airlines or some resemblence of some sort?
We need one of our own yesterday … thanks a trillion.
PF are criminals. They must be made to pay for crimes they have committed against us. We are bigger than they are. We are the people. Power belongs to us. PF are thugs.
No, they are not criminals. They are just thieves.
Hahaha ,PF = twin evils of high debt and low growth of just 3%.You kicked out MMD whose debt was low,forex reserves were record and its average growth was 6.4%…now live with it foolz.
Ba pompwe u see how u have damaged the economy ov our county sad reading indeed & u have no capacity to turn things around.
Mr Fundanga u are being silly. Why alarming the nation with your forged numbers? Stuppppid idddiiiiooot.
Mr Fundanga is 100% right .
A++ rating. What surprises me was the rating of Zambia to stable by the Rating houses two months ago when the debt ratio is this high and the chances of defaulting are very high.
Are we not just waiting for a sunami on the beach?
“He however noted that redemption of any debt works much better if the proceeds of the borrowed money are invested in productive sectors of the economy.”
Dr Fundanga should have concentrated on this aspect in his paper. When he was BOZ govenor under MMD, they had excess money. Which productive sectors did they invest in that he can boast of today?? For one, I know failure by MMD to invest in new power plants while boasting of bringing in investors is what led to the loadshedding and power crisis of 2015.
@Zambian Citizen, Lower Kafue Gorge hydroelectric project was a signed contract and would have been completed by 2014 if it was not CANCELLED by PF as soon as they came into power! (Another Lap Green?}
There would have been NO LOAD SHEDDING! Now Zambia will be paying nearly a BILLION DOLLARS MORE (850 million) for exactly the same project that will be operational FIVE YEARS LATER than it would have been if that contract had not been cancelled!
The LIES by PF that the load shedding was due to drought are exactly that – LIES! To cover up their incompetence and corruption. The LOAD SHEDDING was caused DIRECTLY by the PF!
You are assuming BOZ is an investment unit ???? Your argument us flawed and addressed to the wrong person and entity try ZDA IDC ifyapalako so
@Dora, please!!! Kafue Lower should have started under Mwanawasa, but the political will was not there. As far back as 2006 as the investment in copper mining was ballooning, MMD knew that would put a strain on our limited power generation capacity. It had nothing to do with PF cancelling a contract in 2014 (8 years later!!!) but has everything to do with poor foresight of characters like Fundanga and others to advise appropriately, instead they would rather alarm the nation and look like saints.
@5.1 Just picking on “load shedding was due to drought” this was when one honourable minister was telling the opposition to go and fill Kariba Dam with their urine. Imagine an MP in British politics saying this, his constituency would demand his immediate resignation.
Citizen
And why was that project cancelled by sata ??
@Spaka: Ask Dora that, she brought it up!!
Dora is telling you how empty you pf are for cancelling the project in the first place and you want to shift the blame as usual…..
There’s no mention of the Chinese loans procured for roads hospitals clinics and other constructions.
Are we paying in kind like mukula trees cheap mines over inflated tenders?
Good points raised by Dr.Fundanga.Borrowed spent on over priced projects and public sector admin is not wise management of resources.HOWEVER, some of the money was spent on IMPORTANT SECTORS like ENERGY.BUT,the Dr,has NOT cited SPECIFICALLYwhere the money should have been invested to bring good returns?He condemns loss making parastatals but he doesn’t name them!He condemns IDC for forming more parastals when he knows that the private sectors alone has failed to reduce unemployment and international investors are only interested in mining and evading taxes like Vedanta(KCM) which the MMD gave a mine at next to nothing!Let him TELL US THE BEST WAY TO DEVELOP WITHOUT DEBT!
I guess he is also telling you that even with debt you are not even developing really proportionate to your level of borrowing if anything your growth has even slowed down significantly to 2.4% when in fact these monies were meant to drive growth. The parastatals are well known and govt itself said of all only ZSIC barely breaks even…so the rest are loss making. My advice is that those questions need to be directed to the ones in the driving seat and not Caleb….they need to provide pragmatic answers
@8.1 Shameless, thanks for the direction however, the Dr could have even just listed the loss making parastatals with up to date information. I believe it is not only ZSIC that is breaking even at the moment. Is it true that even after revising tariffs ZESCO is running at a loss? Is it true that after Government took over some of ZAMTEL’s debts the company has been breaking even when afew months ago they announced some profits albeit minimal and have been making investment in infrastructure? The picture about loss making parastatals may not be accurate that is why may be he didn’t list because things have been changing and we have not heard of government bailing key parastatals save for media houses. As for IDC, I believe WE NEED TO CREATE OUR OWN INDUSTRIES, the so called private…
..continued .. As for IDC, I believe WE NEED TO CREATE OUR OWN INDUSTRIES, the so called PRIVATE INVESTORS ESPECIALLY FROM OUTSIDE ARE ONLY INTERESTED IN MINING AND TRADING accompanied by TAX EVASIONS. The latter, Traders hardly create jobs that can support exports and growth in Zambia’s tax base!! IF WE HAVE TO ADD VALUE TO OUR RAW MATERIALS THEN THE IDC SHOULD LEAD THE WAY OTHERWISE WE SHALL FOREVER REMAIN UNDER INDUSTRIALIZED. IF KK and UNIP did not create some industries like ZAMEFA and NCZ, our levels of value addition and industrialization could not have had anything to even use as examples!!
@8.3 zambiaisours
This is the tradegy ……pf and lungu and his whole MPs are too lazy and only seem intrested in issuing corrupt tenders…..they expect the private sector to create everything.
We are telling these corrupt lazy thiefs lungu calls ministers to do some work and create industries…..
Even the USA under trump has realised that creating industries , even if it is cheaper to import from China , the full employment created has more benefits then just saving money on importing. manufacture locally increases the tax base and a working house hold has many benefits that affect even the children……but lungu and pf are too lazy, corrupt and are held hostage to contributers of thier campain funds who hold the import tenders for things we can manufacture locally…..
The 3 Eurobonds, predatory domestic borrowing allied to senseless tribally bigoted expenditure of creating Sata’s own province & useless new districts have combined to completely reverse the country’s almost debt free status attained before 2011. Add Lungu’s kleptomaniac troupe of Koswes administering your coffers & it’s recipe for a failed state.
We have been telling these PF rats to invest half of that borrowed money into production to cut imports and start exporting and we would have had a large workforce paying tax ………now the rats are hallucinating about having created 3 million jobs when they ate begging the IMF for money……importing ZAF, ZP ,Zambia army , police and work uniforms and work cloths while we grow cotton is a heinous crime….
This too is what I’ve been talking about all along, competent economists like Kaleb & Stumbeko understand the consequences of silly borrowing on the economy in general. This is something beyond the comprehension of bookkeepers like Mwanakatwe & her predecessor. We are in s.hit!
This too is what Dora will never be able to get through her thick skull, the deepening tax base is a clear sign that the tax payer pool hasn’t grown any broader contrary to PF assertions of having created 3 million jobs. The consequence of this is commodity shortages as forex for imports dwindle and prices escalate. Ask Kaunda what often happens next, better get ready for war!
Why is Caleb Fundanga a former Governor of BOZ ,not discussing the current Foreign Debt Stock as at March 2018? Why is he trying to be so nice to the current govt? Is he eying the Minister of Finance job after Mrs Mwanakatwe is gone? Very strange and inadequate Article for a former Governor of BOZ. Something Fishy. Time will tell.
Graphics could help deal with a hot topic. First, a representation of debt in relation to GDP over a relatively long period, say from 1980 to 2015. Second, a representation of expenditure on public service before and after new province/s and districts. Three, a representation of public approval of robust infrastructure strategy under PF. The climate change issue, including energy deficit, crop failure and export fluctuation also needed to be quantified clearly and convincingly. In its present form, the paper represents a different economic policy from the PF manifesto. It supports zero debt for political reasons and not economic reasons. Borrowing is necessary. Logically, repaying follows borrowing and not vice versa. Specific cases of wastage could be justiciable but that route needs…
The climate change issue, including energy deficit, crop failure and export fluctuation also needed to be quantified clearly and convincingly. In its present form, the paper represents a different economic policy from the PF manifesto. It supports zero debt for political reasons and not economic reasons. Borrowing is necessary. Logically, repaying follows borrowing and not vice versa. Specific cases of wastage could be justiciable but that route needs more time.
Forget about climate change and energy deficit …pf had $17 billion dollars to spend…..instead of creating assembly plants for solar energy products using Zambian copper and other parts for example , to create employment for our hundreds of thousands of unemployed , they were building roads in kombonis for those same unemployed to be walking on while loafing……
hehehehe Zambians have climbed into a sinking boat
Solar industries could be private or public enterprises. If you are talking about private, then PF government can not be accused of blocking investors. The Investment Agency is in place and capable of handling such investment projects. So, stop the blame game. As for public enterprises, IDC is the vehicle for public enterprises. I doubt that elaborate project proposals were tabled and then thrown out. Communication is important. It is not too late to forward such detailed project proposals to IDC, Ministry of Development Planning, Ministry of Finance, or Ministry of Commerce and Industry. Again, stop these useless negative monologues.
We told by PF rats that investors will come flooding in when we build $1million/km roads……where are they ??
Your over reliance on private sector to do everything for you is your undoing….and stop blaming climate change and energy shortages when there was $17 billion to plan ahead…..
Lets agree colleagues if you know little or nothing about the topic under discussion say little or nothing. We will develop like that.
You, we know that importing ZAF uniforms for $62 million by corruptly giving each other tenders , while we have hundreds of thousands unemployed then building those unemployed roads in kombonis is an forgivable crime against the humanity of Zambia.
It is SATA who started this Eurobond borrowing. That man and his grade 7 qualification.
MHSRIP
Great analysis. If this could be translated into local languages so that 80% plus Zambian understand why we need to change course by jumping off the boat.
Banati gon’ga, is that what you are saying. Alexander Chikwanda was saying our debt is sustainable, kuti imwe sure? Manje its just taxing people left right and center. Its tough brothers and sisters. Mwamene nayionela apa, its just to wait for the one who will come like a thief, seka sitiza kwanisa
Mailoni
Ndimwe mwenze ku vina dunnuna naku sontapo manigi…..
No doubt his analysis as former BOZ director is sober but must we be afraid?
I say NO. Though our debt level is high, it is nowhere near the debt levels of much bigger economies in Europe and Latin America. Our profile in terms of investment is still favorably high as compared to financial management risks. We have the capacity to recover well and get back on track if we implement certain measures just like other countries have done.
Mr. Fundanga should also put an emphasis on the issue of sovereign funding, which I feel has been neglected.
“… Though our debt level is high, it is nowhere near the debt levels of much bigger economies in Europe and Latin America….”
You forgot to mention that those countries are also manufacturing powers…with a large tax paying work force , not your talk time selling and seasonal labourer jobs you have….
Excellent points from Dr. Fundanga.. Listen to this man..
How disappointing to have Bonehead Mushota back commenting on issues she is clueless about. Supposed to be a Phd holder, my foot!!!
I respect Dr Fundanga.
But if upndeez are suggesting that ba uncle baku Namwala ba h.h can do better, I say are you crazy? To start with h.h will twist the dates if all these Euro to Edgar Lungu’s term. Meaning that h.h tells lies daily but he is really clueless about national leadership.
Ba Fundanga naimwe, is $3 Billion Dollars that can honestly put are resource rich country like Zambia in distress? And you call yourself a master of Finance or economy whatever you would want to call it? Please just come out in the open and say you need a job in the PF because you were hoping to be appointed Minister of Finance after Mutati was switched.
People like Fundanga who held positions of Bank Governor needed to think big and no wonder when they were in charge everything in Zambia were stalled. Come on guys, just three days ago, Trump, the US President signed 1.8 Trillion Dollars Spending Bill, now compare that to a paltry $3 Billion, when will you guys allow development to to effect? If only you new the debt of some these so called wealthy nations then you would realise that…
contd
the $3 Billion dollars is nothing. What Fundanga is supposed to be focusing on is “How can Zambia tap into wealthy resources” to support its debt and finance its infrastructure projects? That for me must be the issue.
That is the folly and dellusion of the PF rats……they see western nations owing heavily and think Zambia can do the same….what they can not comprehend is those same western powers manufacture and export everything from planes to shoes while your Zambia has to import even tooth picks…..and has people in the capital city drinking dirty water from contaminated wells……truelly astounding.
Laddies and gentlemen and pf rats…
Zambia has to start creating real employment by cutting down on what we import but can manufacture locally…..GRZ has to step up, those private foringe investors will not do it……pass an SI for all GRZ uniforms , schools and services, to buy uniforms manufactured locally…..approach the largest solar product manufactures to open assembly plants with tax breakes using Zambian copper and slap 200% tariffs on imports….pass another SI to have smoke alarms in all households and public buildings and create a local manufacture industry for fire prevention and detection products…
@ Spaka like lilo
Useless cow dung! You chaps in UPND live in the past. Your comment above proves that you still think the world today is as it was five years ago, NO! Things have changed and those ideas are long dead. What Zambia needs today is to modern infrastructure i.e. sustainable roads, conference facilities, invest in smarter and cleaner energy, develop cities around water bodies especially in Luapula Province, and above invest massively in appropriate education and make Agriculture the cornerstone of our economy.
Look, take or leave it, any country serious taking Agriculture seriously today is the king. When I say Agriculture, I just mean that, from building dams for irrigation, promote fish farming, livestock from sheep, goat, ducks, chickens, turkeys, rabbits, quails, beef…
Malinso..
You are the same theives who were telling us investors will come flooding in when we spend on infrastructure , where are they ??
If even trump has realised that manufacturing jobs to increase the tax base and cut imports are the key as opposed to made in China , you thick of rats only know stealing and borrowing….
Agriculture is being persued at right proportions, it is other imports of things you can make in Zambia that is the problem……
Malinso….
Show us a country that has developed through farming ???
He is ignorant….he can’t even show examples of countries that have developed through agriculture that he is waffelling about……
Little education is more dangerous than cholera. The old man Sata was a charismatic leader but he didnt understand figures at all. Nobody dared to put a different opinion from his for fear of being lynched by overzealous PF cadres. What can you expect from henchmen like Kambwili, Mwenya Musenge, Alex Chikwanda. Zambia is more and more sounding like a lost kingdom. The problem with PF is that they like dancing alot instead of working and all of them live in UTOPIA. Cry my beloved country!
Reading through @ B R Numbs Jr (1.6),the write up has too many fallacies and assumptions taken as facts
i find it fascinating reading BR Mumba’s (aka Mr. Roll On) long and sometimes off tangent write ups. Some times he makes sense, at other times its like he is in a parallel universe!
Although I agree with most of Dr Fundanga’s comments, I wish to also note that he was part of the Chiluba and Mwanawasa administration. It begs the question, what did guys do to ensure that our country had safeguards to prevent our country didn’t slide back into debt? When the issue of the constitution came, you buried your heads in sand. Choosing to amass wealthy, rather than serve the interests of our country at large. We are here because of your actions or lack of them. Due diligence should include systems to protect assets. Our country won’t go anywhere with pontification from the same people who ripped us off and then moved on.
Unfortunately there’ll be no better control than the people we entrust our country to. Regardless what you put in any laws or constitutions. Look at China, now they have a President for life! They simply deleted the line in the constitution that barred the incumbent not run again.
Be careful who you vote for
This is a real challenge for those opposition parties full of small heads to think hard.
Instead of telling Zambians their debt Mgt strategy,they want to spend time on impeachment in the National Assembly.
The debt is not a crisis but a risk that we are already managing.
In fact the issue is simply how to turn the corner quicker.
Though I am satisfied with the measures in place,we all know we can do better as Fundanga has put it.
Additionally,these are not personal issues.We have alot of pros working together at MOF and BOZ and not madam Mwanakatwe alone.
We are screwed!
Ba Fundanga, make yourself relevant properly. Don’t just rank like other red gumu gumus. PF Govt is a solid tree. Is there a progressive country without huge debt? Basic role of govt is to borrow, collect taxes, provide services and pay off debt. Answer this simple question, what are the symptoms of debt distress? With debt distress, will there be a BB+++ rating or gaining exchange rate?
Roads in Zambia are self financing from the tolls and taxes. No debt distress there. Projects financed by Euro bonds such as Kafue Gorge Lower will pay off their contribution from the cost reflective tariffs and FOREX earnings. No distress there.
Domestic debt is the major symptom of corruption in Zambia by civil servants. Its not that Govt has no money to pay. So don’t label it debt distress. The…
We have been barking like a dog on a leash while PF have been looting the wealth of the country in broad day light.
The major solution to deal with this is the ambitious smart Zambia project. The clear record trails it will create will loot out the corrupt civil servants by clearly showing who is delaying what.
If it wasn’t for HIV taking away the smart economists, you wouldn’t have made it this far. Leave Dr Ngandu and Team to do the good job they are doing.
Governor, thank you for the analysis. I hope the Authorities and the Technocrats government will take heed.
Mr. BR Mumba, the Authorities reported that we used ZMW100Million not USD100Million. That is, please, change your records to reflect USD10Million which is roughly equivalent to ZMW100Million at present.
@ MR Mumba
The Governor meant the creation of provinces and districts as well as the creation of GSEs such as Zambia Airways , has or would create entitlements, therefore increase the non discretionary expenditure which in turn would or has already worsened the structural deficit.
It is actually yourself and not Zambia that is in distress. He is respected by HH and UPND not me!
Creation of Muchinga province is the best thing that happened after Kaunda. Surely you chaps cannot see that there can no equitable sharing of resources when some provinces were more than five times bigger than others? Simply administration was a night mate…..Good decision this was.Fundanga just shut up. Talk at the right time not after the band is gone.
You wanted us to continue living in villages while you build Las Vegas type casinos in Lenjeland? On Muchinga creation, we wish Sata was like Jesus, who rose again.
Crimes against humanity come in many different forms! The trouble is the people against whom the crimes have been committed are not aware! They will only realize when the criminals flee and take up their second nationality in the name of dual citizenship but it will be too late then as it is now. The only way out is a fresh start with Economists to mend what what has been broken or start afresh! The same people who created the problem are incompetent to solve the problem – you cannot solve a problem with the same mindset that created it according to Albert Einstein!
Good debate! Among the good points Caleb made is that – when you borrow, make sure that you use the bulk of the money on productive activities than consumption. But you can’t avoid borrowing from either foreign or domestic sources. In any case if you are Keynesian like some of us, government has to spend money to boost the economy. But you can’t spend if you don’t have funds.
I also agree with those who have accused the former governor of having been doozing on the job. Why didn’t he provide this counsel when he was there? As someone has said, where is foresight? The Eurobonds they are claiming to have been over borrowed, they are the ones who were favouring them.Some of us would’ve preferred concessionary money, grants and Chinese loans to Western capital markets. But we were…
cont…. But we were called socialists. Here we are today in a tight corner. Anyway we shouldn’t be afraid to borrow so long as we have strong resource capacity. Business man Trump has led the way. Let’s be positive!