Zambia is slipping back into debt trap, warns JCTR
Zambia is slipping back into debt trap, warns JCTRWritten by George Zulu in Monze
Monday, April 27, 2009 2:48:41 PM
THE Jesuit Centre for Theological Reflection (JCTR) has warned that Zambia is slowly getting back to the debt trap because of government's failure to put in place a legal framework for debt contraction.
And UPND Bweengwa member of parliament Highvie Hamududu has said Zambia’s weak laws on external borrowing has allowed government officials to borrow irresponsibly and unnecessarily.
During a forum dubbed “Meet your leaders” in Monze on Friday hosted by Jubilee Zambia Monze chapter, JCTR programmes officer for Debt, Aid and Trade, Privilege Hang’andu, said it was saddening that the country was slowly getting back to the debt trap the nation had come out from due to unnecessary and irresponsible borrowings resulting from the lack of a debt legal framework which would allow Parliament to decide on the nature of loans the country should contract.
Hang’andu said irresponsible borrowing by the government was unsustainable and needed to be stopped.
"Three years ago after Zambia reached HIPC completion point, nations cancelled about 87 per cent of the debt and only 500 million was supposed to be paid back. However we have seen that the debt has started increasing slowly and by the end of last year, Zambia had accumulated over US $1 billion, you can see that we are slowly going back to the debt trap because of the irresponsible contraction of loans," Hang'andu said.
He said there was need for Parliament to be involved in the contraction of the loans than leaving a small committee to decide at the expense of the people.
"It is not sustainable to borrow money for buying vehicles for ministers and permanent secretaries; we need to borrow for capital investment and to improve on raw materials, we should not borrow for prestige," he said.
Hang'andu said the government should also formulate the National Debt Management Council to scrutinise the loan contraction process after the ministry responsible has identified the creditor.
"There is need to establish a debt management strategy which clearly states who else apart from the Minister of Finance and National Planning should make any loan contraction and there is also need to have a national debt and grant account which will make it easy to monitor and account for all donor funds and loans. This will create accountability and transparency in the manner government will be borrowing money," he said.
Hang’andu said the matter of a debt strategy and legal reform in the nation was not only necessary but a matter of urgency to serve the nation from falling into another debt trap which would be difficult to come out from as government had proved to be irresponsible in the manner it was contracting loans.
And Hamududu said it was not necessary to borrow for consumption as this showed a lack of planning on the part of government officials.
"Government has continued to borrow huge amounts of funds without consulting the people of Zambia and if this continues, it will threaten the development aspect of the nation. We need to strengthen the laws on borrowings," said Hamududu.
And Jubilee Zambia Monze Chapter chairperson Aliphus Chibamu observed that there was lack of political will in addressing issues of loan contraction and monitoring the utilisation of the public funds by government officials.
Chibamu cited the government’s failure to follow up the misapplication of K300 million meant for the cattle restocking exercise and the money allocated for the rehabilitation of Bottom Road as highlighted in the 2007 Auditor General’s report.
Labels: DEBT, HIGHVIE HAMUDUDU, JCTR
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