Saturday, February 22, 2014

PF will leave a 'debt legacy' - Milupi
By Abel Mboozi
Sat 30 Nov. 2013, 14:01 CAT

THE PF will leave a debt legacy for Zambia going by the rate at which it is borrowing externally, says Alliance for Development and Democracy president Charles Milupi.

Commenting on the decision by Parliament to pass a motion to give finance Minister, Alexander Chikwanda, powers to increase Zambia's debt ceiling from K20 billion to K35 billion, Milupi said: "This is what we feared, K35 billion that he has increased, the debt ceiling is equivalent to over U$7 billion."

"And U$7 billion is what we ran to the World with Jubilee 2000 to seek forgiveness, so already PF have no shame about it; they have pushed it back to where it was at the time when the whole World was forgiving us."

Milupi said it was sad that the government was busy borrowing money when it was supposed to be utilising resources drawn locally.

"We told the PF government to follow the Levy Mwanawasa example and not the Rupiah Banda example because in April 2008, the mineral taxation regime was passed which brought in windfall tax, in October when Rupiah Banda became President, he cancelled it for reasons know best to himself," he said.

"The PF was opposed to that but when it came into power in 2011, the government refused to reinstate the windfall tax and the end result is that the mining industry has continued to operate with high copper prices, high production but with very little revenues coming to our coffers."

Milupi said instead of using revenue from that part of the sector, the government was borrowing externally for consumption.

"We are borrowing for consumption because this government has not really sat down to think about where the borrowed money is going to be used," he said.

"As we speak now, money from the U$750 million Euro bond, some of it is unutilised, even though it's more than a year when we got it and we are accruing interest over this fund."

Milupi said it had become clear that the government was borrowing to fund an excessive cabinet size and to fund a growing civil service because of the new districts it was creating.

"So to fund these high increases of cabinet ministers, the President, Vice-President, MPs is what we are borrowing for and these are consumptive," he said.

"So we are borrowing to consume and the end result is we shall fall back into a debt portfolio which shall overburden the nation."

Milupi said there was no doubt that Zambia was furthering into a debt trap because of lack of foresight on the part of the PF government.

"This minister, when we told him that bring back the windfall tax, he called us names but now everybody is crying 'bring back windfall tax'," he said.

"We told them that ZRA was not sophisticated enough to track all taxes from the mines and, therefore, windfall tax was one of the easy ways of drawing revenue from the mines but they refused to do that."

Milupi said in the two years the PF had been in government, it had failed to recoup anything from the mining industry.

"Completely zero and that's the legacy that the PF government will leave for this country," said Milupi.

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