Friday, June 03, 2011

Rupiah is a reckless borrower, says Magande

Rupiah is a reckless borrower, says Magande
By Patson Chilemba
Fri 03 June 2011, 04:00 CAT

RUPIAH Banda is a very reckless borrower, says Ng’andu Magande.

Reacting to President Banda’s remarks that the government was getting money from the capital markets for the developmental projects he was announcing, such as the K300 billion urban roads rehabilitation in Lusaka, interim president for National Movement for Progress Magande said he was upset about President Banda’s style of leadership.

“He is saying ‘we are getting money from the capital markets’, and that means we are actually borrowing from the capital markets which is quite expensive. Now when government is borrowing, there should be enough advertisements for the public to know that you are going to borrow money from a capital market,” said Magande, a former finance minister, who has held the portfolio the longest in the country.

“So if they floated a bond, who actually were the administrators for that bond and how many people bid for that bond and at what price was that bond going on the market? So again that is lack of disclosure.”

Magande said President Banda was committing innocent Zambians to more debts which they did not even understand how got into them.

“The next thing, he says ‘the mines are paying more tax’. Can we know how much more tax the mines are paying and why are the mines paying more tax? Because we were told before that those people (mine investors) could leave if we impose any new tax for the benefit of the Zambian people,” he said.

On President Banda’s statement that they were varying the budget, Magande said that simply meant that President Banda was taking money from some projects which were catered for in the 2010-2011 national budget and taking the funds to finance other projects.

Under the public finance Act, this is illegal. You are not supposed to vary capital funds from one project to the other because when that budget was approved by Parliament, it was on the clear understanding that the member of parliament for a constituency where the project was shown in the Yellow Book went to tell the people there to say ‘we are going to have this project’,”Magande said.

“If you have to vary and then stop that project, abandon it, people must know. So we want to know which projects is he abandoning now, and which projects is he starting, and for what? And that must go to Parliament for them to approve the variations.”

Magande said no ministry or any controlling officer was allowed to vary the capital budget under the Financial Act, except with the authorisation of Parliament.

“So if he is saying that is being done without any consideration it means really he is upsetting the whole budget. If he is capable of upsetting and varying an annual budget, what is happening to the Sixth National Development Plan which is for five years?

What is happening to Vision 2030 which is for the next 20 years?” Magande asked.

“It simply means now he is upsetting the whole planning system in the country. And how can we have confidence in the credibility of the budgeting system?”

Magande said he found it hard to understand President Banda’s management, saying he was destroying the Financial Management Systems which had been in existence for years.

“All it means therefore is, if we are going to borrow money and he says ‘now the economy is picking, now people are throwing money in our face and we are collecting it as bids’, it simply means that he is a reckless borrower,” Magande said.

“And you know what happens to a reckless borrower, he will end up committing the family for the future and we will end up again being a highly indebted poor country again.”

Magande said he would love to see how the people in Mandevu and other areas would manage to use their geysers since there were critical shortages of water in most areas as a result of lack of piped water.

He said the pipe which connected water to Lusaka from Kafue was laid in the 1970s, and could only cater to a small population of one million people unlike the current two million people.

Magande said nobody was even talking about putting up another water pipe.

“Where will these people in Matero get the warm water to go through their solar heating systems?” asked Magande.

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