Borrowing for right capital expenditure is fine - Thornton
By Moses Kuwema
Wed 25 Sep. 2013, 14:00 CAT
BRITISH High Commissioner to Zambia James Thornton says major borrowing to fund the right capital expenditure is fine. And Engineering Institute of Zambia president Bernard Chiwala says there has to be a balance in terms of financing by debt or equity of domestic revenue.
Speaking when he featured on ZNBC's The Quest programme on Monday night, High Commissioner Thornton said major borrowing was fine as long as the capital expenditure helped the country to grow so as to provide the extra revenue which would enable the country to pay off its debt.
"Major borrowing in order to fund the right capital expenditure is fine. There are three different angles to this; you can raise revenue, you can borrow within the limits and you have got to ensure that your spending does not outstrip the revenue you raise. I hope the government has got all those in mind. So infrastructure is a very good way to go. You need power, you need roads, the railway, so you have to be careful to pick the right projects, I think," he said.
And High Commissioner Thornton said Zambia's debt and Gross Domestic Product ratio was still impressive, something he said was good.
The government and International Monetary Fund have projected the country's GDP growth this year at six per cent from the 7.1 per cent earlier projected.
And Lubansenshi Independent member of parliament Patrick Mucheleka says there is need to strengthen the aspect of domestic revenue mobilisation.
Meanwhile, Mucheleka said the ambitious social programmes that the PF government had embarked on would result in the country sliding into a serious debt trap.
And Chiwala, who is also permanent secretary in the Ministry of Works and Supply, said engineers were ready to support policy directions that the government was putting forward.
He said it was good that the funds that were borrowed through the use of the Eurobond went to infrastructure.
"We are suffering at the moment with power deficit and part of the money went towards the infrastructure so that we have power continuously so that mines and industries can operate. Part of it went to the roads. You need to open up the country so that you can take goods from one corner to the other part of the country. Tourism for example, the only place we know is Livingstone, but the Northern circuit needs to be opened up so that people can go there and see the attraction we have. It will require financing and the beauty of it is that it is not going for consumption. There will be a return that will come along the way so that must be supported and encouraged but it should be within the limit that we can afford continuously," Chiwala said.
During the same programme, Private Sector Development Association chairman Yusuf Dodia said it was unfortunate that President Michael Sata did not mention the issue of budget overrun and deficit in his speech to parliament last Friday.
Dodia said the budget overrun was a management issue and that he expected the President to fire some warning shots going into 2014.
Labels: BERNARD CHIWALA, DEBT, JAMES THORNTON
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Thornton urges sharing of tax info to curb evasion
By Kabanda Chulu
Thu 21 Mar. 2013, 14:00 CAT
BRITISH High Commissioner to Zambia James Thornton says there is need to improve the exchange of tax information between different countries so that
multinational companies stop playing 'cat and mouse' with revenue authorities.
And High Commissioner Thornton has advised government and opposition parties to be tolerant of each other and uphold the highest standards in politics, human rights and fundamental freedoms if Zambia is to continue receiving foreign investments.
Outlining Britain's priorities for its presidency of the Group of Eight (G8) of world leading economies in Lusaka on Tuesday, High Commissioner Thornton said his country would focus on three key areas of tax, trade and transparency aimed at benefitting Africa.
He said there was need for a serious debate on tax evasion and aggressive tax avoidance being carried out by multinational companies.
"This is a problem that affects both the developed and developing worlds. We want to look at how to better exchange tax information between different countries so that these big companies stop playing cat and mouse with revenue authorities," High Commissioner Thornton said.
"Here in Zambia, effective taxation will be critical if the nation's riches are to fully benefit its people. Zambia is endowed with abundant natural resources and DFID (British aid organisation) is looking at ways in which it can support the Zambia Revenue Authority."
On trade, High Commissioner Thornton said one problem with trying to buy and sell goods abroad was the sheer amount of paperwork involved in doing so.
"We want to use the World Trade Organisation's ministerial meeting this December to help resuscitate the Doha round and secure agreement to get rid of this bureaucracy because such a deal alone can be worth US$70 billion to the global economy and help trade flow freely across the world," he said.
"We also want to use the G8 to unblock trade corridors across Africa and reduce transport costs that slow down the movement of goods. As a landlocked country, Zambia is also a transit hub for the region and we shall support more programmes to boost regional trade and integration."
On transparency, High Commissioner Thornton said there was need to raise global standards so that more information should be available on land deals or mining contracts in order to ensure that citizens benefit from their countries' resources.
"In the G8, we will look at how we can make all government data more open and transparent and how we can use new technology to make it accessible to citizens so that information is published on the internet and we can all see how much governments are being paid for the natural resources and how much money is invested in the economy. For Zambia, enacting the freedom of information Bill is critical and we hope Parliament will table the matter in the next session," he said.
He said when seeking to invest, businesses look at a wider picture including politics, human rights and fundamental freedoms such as freedom of association and assembly.
"We call on all in Zambia -government, opposition and civil society - to uphold highest standards in these areas of freedoms. All have a right to express themselves and to congregate peacefully but all should recognise that others have that right too," said High Commissioner Thornton.
Labels: JAMES THORNTON, TAX EVASION, TAXATION
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