Maravi

(The Post) Zambia risks falling into debt trap, says Hichilema

Zambia risks falling into debt trap, says Hichilema
Written by Katwishi Bwalya
The Post, 6 February 2009

UPND president Hakainde Hichilema has said Zambia risks falling into a debt trap because of lack of a debt acquisition policy to control external borrowing.

During the newsmakers forum organised by the Press Freedom Committee (PFC) of The Post on Wednesday night themed 'Will this year's budget answer the economic challenges facing the country', Hichilema said the budget lacked clear guidelines on how poverty would be reduced in the country.

"We have once again embarked on an irresponsible borrowing and the problem is that we are using the money we are borrowing for consumption purpose instead of putting that money into productive ventures of the economy," Hichilema.

"We should borrow with knowledge and the capacity to pay back because this time around, no one will give this country relief because we are busy playing games when borrowing."

Hichilema said at the time of attaining the Highly Indebted Poor Countries (HIPC) completion point, the country managed to reduce its external debt to US$500 million.

"The external debt is now at US$2 billion, but the country should know that this time no one will give us relief because the whole world is faced with a global crisis and hence the need for debt acquisition policy," he said.

Hichilema said this year's budget was a clear sign of lack of leadership in the country. He said it was high time that Zambians started analysing their government on the way the economy was being run.

"The kwacha has been battered, it is losing value and if you don't know, the economy started doing badly after the general election when President Rupiah Banda was ushered into office and is a clear sign of a vote of no confidence on the way the economy is being run by this government," Hichilema said.

"I would have applauded the budget if it had addressed serious issues affecting people. For instance, the K700,000 tax threshold of [finance minister Dr Situmbeko] Musokotwane just means that you are sending six people to bed without food because a family of six will need K1.5 million per month."

Hichilema said the increment in electricity tariffs would now mean that more households would not afford to pay for electricity.

"Zesco spends 50 per cent of its operating income on its staff welfare and salary of workers when their friends in the region are only spending 30 per cent of the staff welfare and salaries. About 80 per cent of households in Zambia have no access to electricity and with the increment in the tariff, the number will likely increase to 85 per cent," Hichilema said.

He said the budget had no clear signal on how it intends to punish civil servants misusing public funds.

"There is nothing in the budget to send a clear signal to civil servants abusing public resources as brought out by the Auditor General's report, because even in the fight against corruption we have limited ourselves to the Chiluba era. What about after 2001? Let us stop being vindictive," said Hichilema.

"The problem is that they are first increasing their salaries and forgetting the civil servants and that is leading to increase in corruption. The first bill Rupiah Banda signed when he become President was to increase his salary."

Labels: DEBT, DOMESTIC DEBT, HAKAINDE HICHILEMA, PFC

posted by MrK @ 4:54 PM