Maravi

Zambia's loan contraction process is not transparent, says Lewanika

Zambia's loan contraction process is not transparent, says Lewanika
By Bivan Saluseki
Wednesday October 17, 2007 [04:00]

Western Province Jubilee Zambia secretary Mwangelwa Mbikusita-Lewanika has said Zambia's limits and purposes of getting new loans were highly ambiguous and not open to scrutiny. Lewanika yesterday said Zambia had in the past borrowed excessively and recklessly, and did not manage the debt well.

"The level of public expenditure, in particular on developmental projects, has not been commensurate with the high levels of borrowing, especially during most part of the first 10 years of the Third Republic, as evidenced by the high levels of plunder," he said.

Currently, the legal prerogative to procure new loans lies in the hands of the Minister of Finance and National Planning and Parliament does not need to approve the entry into loan agreements.

"This anomalous situation must be stopped. To achieve prudent procurement of loans by the government of the day, the loan contraction process should be enshrined into the national constitution," he said.

Lewanika said there were problems or shortcomings in the ways and means the debt has been incurred and that was a direct result of the fact that the legal framework governing the contraction process was inadequate.

He said the current loan contraction process was not transparent and lacked accountability, noting that under the current legal framework, the loans and guarantees (authorisation) Act, Cap 366 of the Laws of Zambia, gave a blanket authority to the government to borrow.

"In view of that, there is need to put in place measures that would ensure that the resources will be spent on Zambian people, especially the poor. Such measures include the Debt Mechanism, which is a broad participatory, transparent and accountable way of disbursing toward poverty eradication any savings coming from debt relief or cancellation," he said.

He suggested that the Constitution and Act of Parliament must provide the authority to borrow while terms of reference or guidelines to negotiating loans should be in the statute itself, at least, as regulations.

He said the public should be involved in the loan contraction process.

"Parliament should have its constitutional powers to approve all loans and have them gazetted and made available for public examination before being signed," he said.

Labels: DEBT, JUBILEE ZAMBIA, LOANS, PARLIAMENT

posted by MrK @ 3:24 AM