Maravi

Govt's planned $400m debt perturbs CCZ

Govt's planned $400m debt perturbs CCZ
By Fridah Zinyama
Thu 14 Oct. 2010, 16:00 CAT

THE Council of Churches in Zambia (CCZ) has expressed sadness at government’s intentions to borrow about US $400 million to finance programmes in next year’s budget, saying this might take the country back to being indebted.

And the Zambia Competition Commission (ZCC) has stated that the 2011 national budget will enhance competitiveness of the Zambian economy and reduce the cost of doing business through accelerating infrastructural development.

Commenting on the K20.5 trillion 2011 budget presented to parliament by finance minister Situmbeko Musokotwane, CCZ stated that the government’s intentions to borrow heavily in next year’s budget might take the country back to the pre-Jubilee debt cancellation campaign era where the country’s foreign debt had reached over US $7 billion.

“We therefore urge the MPs to compel the government to justify in clear measurable terms plans for such borrowings so that the country is not tied to a loan that we may not need and which may commit our children for generations to come,” the Council stated.

CCZ also called on Parliament to reconsider the proposals that the church and civil society had originally presented to the Mung’omba Constitution Review Commission on the need for parliament to scrutinise and approve all borrowings on behalf of the nation.

“We sadly note that even though in the budget speech, the Minister of Finance assures the nation that government places paramount priority in ensuring that public financial resources are used for the intended purposes, the government has proposed removing section 37 from the current Anti-corruption Commission (ACC) Act that protects public finance from abuse by thieving public officers,” CCZ stated. “We hope the MPs will seriously consider this as they debate the proposed amendments to the ACC Act.”

And CCZ stated that the absence of agreed government benchmarks and instruments in assessing the performance of the Zambian economy had for over the years created a problem for the church and other stakeholders in assessing the performance of the economy.

“For example the UN has their Human Development Index which contains benchmarks for measuring human growth and development in a nation,” the Council stated. “Our observations as Church leaders, therefore, are that even though the government has recorded a 6.4 percentage growth, this figure is difficult to quantify as we do not know how many Zambian families are now better off this time than they were last year. We also do not know how many quality jobs for Zambians were created by the economic activities that produced the reported growth in the economy.”

CCZ stated that the absence of government benchmarks to measure the performance of key economic sectors made it difficult for the country to measure whether the economy was achieving real social and economic development that could benefit the Zambian poor.

And the ZCC stated that government’s decision to prioritise resources in the 2011 budget on infrastructure development would undoubtedly have the likelihood of ensuring that Zambia remained competitive for trade and investment.

ZCC director for Consumer and Public Relations Brian Lingela stated that the investment in infrastructural development, particularly rural roads, would enhance connectivity to markets and thereby stimulating trade and investment in most rural areas whose potential have not been tapped for sometime due to poor road infrastructure.

Lingela noted that most rural roads had not been prioritized in the past leading to lack of business competitiveness in view of the high cost of doing business in such areas.

“When you look at the allocation for roads, rural roads have been prioritised and this will open up these areas for trade and investment and ensure that they also contribute effectively to the national economy particularly that the cost of doing business in those areas is likely to be reduced,” Lingela stated.

Compared to other southern African countries, one of the challenges that Zambia has continued to face in relation to business competitiveness especially in rural areas has been poor infrastructure.

The Commission further stated that there was need for a further reduction in bank interest rates to complement infrastructural development.

“It is the Commission’s view that despite the country sustaining improved macroeconomic performance over the past few years, bank lending rates still remain high,” stated Lingela.

Labels: 2011 BUDGET, CCZ, DOMESTIC DEBT, SITUMBEKO MUSOKOTWANE

posted by MrK @ 4:19 PM