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JCTR advises co-operating partners not to lend irresponsibly

JCTR advises co-operating partners not to lend irresponsibly
Written by Fridah Zinyama
Monday, March 30, 2009 7:17:50 AM

THE Jesuit Centre for Theological Reflection (JCTR) has urged Zambia's co-operating partners not to take advantage of the country's favourable fiscal space to lend irresponsibly.

Commenting on the recent loans given to Zambia by its co-operating partners such as Japan and the International Monetary Fund (IMF), JCTR Debt, Aid and Trade programme coordinator Tina Moyo stated in a press release that Japan, as a member of the Paris Club, should show great commitment to the five good practice principles of the Paris declaration if its official development assistance (ODA) flows to Zambia were to yield positive results.

“On March 26, the Japanese government offered the Zambian government a loan worth US $274 million for the implementation of the increased access to electricity services project to cover five areas in the country,” Moyo stated. “Much as we appreciate the loans, the creditor countries should ensure that Zambia maintains its fiscal discipline.”

Moyo observed that as an institution that played a key role in the success of the HIPC completion point through the Jubilee-Zambia's debt cancellation campaign, Japan should ensure that Zambia did not sink into debt again.

“Just a few weeks ago, the International Monetary Fund (IMF) said it will offer the government a loan worth US $200 million. The Japan and IMF loans are just two loans among several loans that the government has signed since the beginning of this year,” stated Moyo.

And JCTR debt and public resource monitoring officer Privilege Haang'andu warned that unless Zambia worked on a more transparent debt management strategy, it would perpetually be prey to floating loans from developed countries and the International Financial Institutions (IFIs).

“It is crucial that government realises that every single loan contraction commits the country's future taxes to debt servicing at the expense of national development,” he cautioned. “It is for this reason we have tirelessly implored government to urgently work on a loan contraction framework that involves Parliament in setting annual ceilings of what can be borrowed in a given financial year.”

Haang'andu stated that although HIPC was often used as a basis for providing external financial support, Zambians had not yet experienced the benefits of HIPC and the Multilateral Debt Relief Initiative (MDRI) even after bearing the severe conditions of processes.

Labels: IMF, JCTR

posted by MrK @ 6:18 AM