Sunday, July 27, 2014

Chikwanda misleading Sata on debt - Nawakwi
By Henry Sinyangwe
Fri 24 Jan. 2014, 14:01 CAT

EDITH Nawakwi says finance minster Alexander Chikwanda is misleading President Michael Sata on debt sustainability following the government's path of 'reckless' borrowing. And Nawakwi who is FDD leader says the country is experiencing the worst farming season since independence owing to the late delivery of inputs.

In an interview following Chikwanda's statement during ZNBC's Sunday Interview that Zambia will not slide back into a debt trap, Nawakwi said Zambia's debt would be unsustainable if the government continues on the binge of borrowing from the commercial window.

"When they took over government about two years ago, the total debt was US$1.7 billion, as we are talking now, the debt is over US$3.5 billion and they are planning to borrow an addition of US$4 billion in the next two to three years. Then you add all these figures, the amount of debt that the PF will accumulate on behalf of this country by the end of their first term will be over US$8.2 billion, far much more than what the people of Zambia tightened their belts for and managed to clear in the 27 years of UNIP government," she said.

Nawakwi said the government should explain where it would get the money to service the debts.

"If the President today assures us that the debt is sustainable, the question he must answer is; where is the income that is going to service the debt, because the private sector is not growing, the trade sector has been strangled by the introduction of exchange controls, the international reserves are at their lowest in the last two years," she said.

Nawakwi said there were policy inconsistencies in the economy that had sent a wave of scare to the business community.

"The business community is in limbo and doesn't know what next this government is going to introduce," she said.

Nawakwi also said the agriculture sector was also being mishandled.

"If the President is saying to us that the budget is on track, can I be told why there is no urea in Chongwe. This is end of January and these are some of the policy inconsistencies which instead of generating cash from the agriculture sector, from the industrial sector, from the trade sector, these sectors are being strangled because the President doesn't want to face reality of our advice that this minister Chikwanda needs to be assisted to rest," she said.

Nawakwi said there was fear of hunger next year because the agriculture sector was not being properly run.

"And if you don't finance agriculture, you are going to have hunger the following year, you need money to import food to be able to feed people. Proper financing in the agriculture sector can help the government achieve even a 12 per cent growth in one year. Get half of the money that these people are overpricing in the road contracts and put it in agriculture, we could have surplus food for export and the money earned can be used for infrastructure development," she said.

"There is no malice in telling people that you are strangling our economy, and that's what they have done. What minister Chikwanda has created by the Statutory Instrument which is basically for control of foreign exchange, he has created a huge parallel market for the dollars, can the minister come out in the open and tell us why there is shortage of foreign currency in the system?"

Nawakwi said there was no government that did not borrow for infrastructure development, but that the current borrowing was unstructured and unregulated.

"We are happy about having a bridge in Chiawa, we are happy about having a road, we would even be happier if this government could realise that the same money they are using for the roads, they could finance the farmers and the profits from the farmers could be used to finance the roads. But what seems to happen is that they have a one track mind, they don't have the overview of what they can do as a government to generate money and also continue to undertake the infrastructure development," she said. "And that's why we are saying the debt is unsustainable because they are not able to finance education, health and agriculture."

And Nawakwi alleged that the government was getting funds from the parastatals because it had run broke.

"The President is aware that the money we sent to Zambia Railways was collected back, the President should be aware that all the money that was sent to parastatals for various projects, the minister went and got it back because he burst the budget. So when you stand up and mislead the President, we all get baffled. Maybe the President wants to be misled, because ideally I wouldn't come to the defence of the Minister of Finance because the activities are not pleasing anyone," said Nawakwi.

Chikwanda, during the interview, also wondered why Zambians believed the International Monetary Fund more than their own government on the country's economic status.

Chikwanda said the government was not worried about issues to do with debt management because everything was on the right track.

And President Sata on Sunday posted on his Facebook page that the country's risk of external debt distress remained low as all debt indicators were below the indicative policy thresholds.

President Sata assured Zambians that the government was cautious about landing the country into another debt trap.

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