Maravi

‘Zambia can’t stop borrowing’

COMMENT - Oh, so Zambia 'has to keep borrowing' because 'local resources are not enough'? So how does the minister explain getting rid of the Windfall Tax, which he called 'odious' to the mines. Obviously, his borrowing is not 'odious' to the Zambian taxpayer. Any question as to who they are really working for?

‘Zambia can’t stop borrowing’
Written by Kabanda Chulu
Thursday, June 11, 2009 12:28:12 PM

ZAMBIA can’t stop borrowing because available local resources are not adequate to sustain the financing of many projects around the country, finance minister Situmbeko Musokotwane has said.

Commenting on concerns by stakeholders that government was not being careful with loan contractions especially from China, saying this may result in the country getting back into the debt trap, Dr Musokotwane said the government was now wiser when borrowing since there was a debt sustainability analysis programme in place.

“This system is able to guide us on how to repay and service debts and those debts should be used for productive purposes and Zambia did not stop borrowing after attaining HIPC completion point and this is not first time we are borrowing since it is a continuous process and there is nothing strange about it,” Dr Musokotwane said.

“When presenting the budget, we do mind and plan how much to borrow and we do borrow locally and abroad from various sources. This is because requirements are enormous and we can’t sustain them through our own resources hence we need to borrow to sustain the many projects around the country.”

He said the basis of borrowing should be to use borrowed money on activities or developments that would bring taxes through wealth and job creation so that proceeds were used for debt repayments.

“We need to build roads, generate power and other amenities and these infrastructures are huge and you can’t from any given budget cycle, so the idea is as you borrow, apply the funds on those activities or developments which will bring taxes to be used for debt repayments,” said Dr Musokotwane.

“And the US $7 billion debt we had, in absolute terms it was a small amount by any standards but through our inability to service it, that was too huge because economic activities that needed to be sprouted out of that did not happen.”

Labels: CORRUPTION, DEBT, SITUMBEKO MUSOKOTWANE

posted by MrK @ 11:32 AM