Maravi

Zambians deserve to know why government is borrowing - Magande

Zambians deserve to know why government is borrowing - Magande
By Ernest Chanda
Mon 28 May 2012, 13:29 CAT

NG'ANDU Magande says Zambians deserve to know why their government is borrowing money, including the terms and conditions attached.

Magande who is opposition National Movement for Progress president and the country's longest serving finance minister said it was good that the draft constitution has adopted a clause compelling government to get National Assembly approval for any loans it wants to contract.

In 2009, the National Constitutional Conference (NCC) overwhelmingly rejected the clause on grounds that it would delay developmental projects that needed to be undertaken urgently.

Under the current arrangement, the government borrows money without National Assembly approval, regardless of the terms and conditions attached to those loans.

But the technical committee appointed by President Michael Sata to draft a new constitution has reintroduced the clause.

Article 282 of the draft constitution states that: "(1) The government may, subject to this article, borrow money from any source. (2) The government shall not borrow, guarantee or raise a loan on behalf of itself or any State organ, State institution, authority or person except as authorised by or under an Act of Parliament. (3) Notwithstanding clause (2), the government shall - (a) lay before the National Assembly the terms and conditions of the loan which shall not come into operation unless approved by a simple majority vote of the National Assembly…"

And clauses 4, 5 and 6 of the same Article state that: "The terms and conditions required to be laid before the National Assembly under clause (3) shall include the following: (a) the source of the loan, (b) the extent of the total indebtedness by way of principal and accumulated interest; (c) the provision made for servicing or repayment of the loan; and (d) the utilisation and performance of the loan.

"(5) The National Assembly may, by resolution, authorise the government to enter into an agreement to give a loan or grant out of the consolidated fund or any other public fund or account. (6) An agreement entered into under clause (5) shall be laid before the National Assembly and shall not come into force unless it has been approved by a vote of not less than two-thirds of the Members of Parliament."

Magande said Zambians had for many years suffered because of loans contracted by their government, some of which they did not know the purpose.

"I think that would be a good idea because when the government is contracting debts, normally it is the minister of finance who leads the negotiations and also of course other ministries join in. But when things go wrong and we need to pay those debts the people who suffer are the general populace because when we are servicing these debts the citizens can't get good schools, they can't get medicines, they can't get fertiliser," Magande said in an interview.

"So it would be a good mechanism of trying to make the citizens understand what the government wants to borrow and for what purpose; so that at the time that our grandchildren have to pay the debts they will know that those debts were committed to a good cause. It is just that the information which had been proposed in the NCC constitution that time was too detailed for a constitution."

He said the people through their representatives in the National Assembly should have a say on any loan contracted.

Magande said there were some loans contracted by the government which should not have been.

"But the way things are done now, I was in the ministry, but I felt that some of the loans perhaps should not have been contracted in the manner they were. For example, there's a huge loan which the RB Rupiah Banda government got for Kalabo-Mongu road. Now, everybody is saying, surely you spend K1 trillion on one road in one part of Zambia," said Magande.

"What are the benefits going to be for the rest of the Zambians in Mpulungu, in Monze who have to pay back that loan? And perhaps if we are able to do that, then some of these big projects would get a national debate before we even undertake them so that they don't become just petty projects for the leader who is there at the time that perhaps you are putting that loan."

Labels: CONSTITUTION, DOMESTIC DEBT, NCC, NG'ANDU MAGANDE

posted by MrK @ 4:43 PM