Govt shouldn't borrow to finance abuses - Mwale
By Stuart Lisulo
Mon 11 Nov. 2013, 14:00 CAT
CHIPANGALI MMD member of parliament Vincent Mwale says continued government borrowing risks sliding the country back to high indebtedness.
Last week, finance deputy minister Keith Mukata told parliament that the country's external debt level had risen from US$1.7 billion in September 2011 to US$3.2 billion by September 2013.
Mukata said to avoid plunging the country into more speculative debt, the ministry had been conducting a Debt Sustainability Analysis on an annual basis in line with the debt management strategy, to determine Zambia's debt carrying capacity and fiscal space for new borrowing.
But Mwale, in an interview, said it would be very difficult for the country to keep borrowing at the current rate.
At the rate we are going it will be very difficult to have the fiscal space to borrow more money; we hear Zambia has been downgraded - the credit rating has gone down and it means the money we have to borrow now has to be at higher rates, Mwale said.
He questioned why the government needed to continue borrowing when there were still a lot of unaccounted for funds.
We have not been prudent. When you look at the Auditor General's report, there's a lot of unaccounted for funds, a lot of abused public funds. Why then not secure the little money that we have? Why not protect the money that we have? Because if we do, sometimes we may discover we don't have to go out and borrow, it is not necessary. Why should we borrow to finance abuses? It is not appropriate for us to go out and borrow internally and externally even before we take care of the resources that we have, said Mwale, who is also chairperson of the Parliamentary Public Accounts Committee.
He said it was important that all funds parliament approves for the Executive to use are protected if government borrowing is to be justified.
If we do that and we know that there is something that is lacking, people will understand if we said we want to borrow. Right now the President was commissioning the foundation stone at the airport; that is not going to be financed by our budget. I'm sure we are borrowing so that actually tells us that the debt stock has gone up, Mwale said.
He said the national budget under the PF government has "almost doubled" as compared to the MMD's last national budget, which meant that there were actually more provisions for government expenditure.
There is so much money at the disposal of the current government. The budget has grown, there's more they can do than what the previous government had, so why then do we want to go beyond that and even try to get more money from outside? If they cannot use this money that we have properly, it would be very difficult to justify why they should go out and borrow. And also the morality side of it, the people that will pay back are our children; the question they will be asking us is, 'why did you have to borrow and leave us with this debt and yet you had the money that was wasted?' It is not morally right to do that, he said.
Meanwhile, Mwale said he hoped the motion he moved last month would bring amendments to the current legislation that relates to borrowing to enable parliament have more powers to restrict government borrowing and introduce a 'debt ceiling.'
It is not just about us scrutinising them Executive but also it is in their interests that they quickly come in and bring in the necessary amendments because people will not see them as a party, we will be borrowing collectively as a country, said Mwale.
Labels: DEBT, KEITH MUKATA, VINCENT MWALE
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Mukata urges more work to render economic gains tangible
By Gift Chanda
Wed 15 May 2013, 14:00 CAT
FINANCE deputy minister Keith Mukata says more work is required by everyone to translate positive economic results into tangible benefits for majority people in Africa.
Speaking at the African Community of Practice (AfCoP) regional workshop that opened in Lusaka yesterday, Mukata said the African continent had in the past few years recorded favourable economic results such as strong economic growth rates of more than five per cent but the challenge that had remained was to match the strong growth rate to poverty reduction.
He said "a lot of work is required to translate these positive results into tangible benefits in the lives of the majority of the people on the continent".
Mukata said regional economic integration, one of the strategies adopted by African countries to ensure positive macro-economic gains translate into tangible impact on ordinary people, should be strengthened.
The workshop is being held under the auspices of COMESA and the African Development Bank (AfDB) aimed at creating capacity for member nations to ensure more results-oriented and focused approach towards development.
COMESA deputy secretary general Dr Kipyego Cheluget observed earlier that focusing on results would enable the regional economic bloc to have a strategic perspective of whether initiatives being implemented were heading towards intended impacts.
And AfDB resident representative in Zambia Dr Freddie Kwesiga said the focusing on results initiative approach would respond to the challenges Africa was facing.
Meanwhile, AfCoP co-chairperson Ledule Bosh said the focusing on results initiative approach towards development in Africa would provide a framework for accelerating regional integration.
Labels: AFCOP, KEITH MUKATA, NEOLIBERALISM
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Sampa says he requested for transfer from finance ministry
By Chiwoyu Sinyangwe and Henry Sinyangwe
Mon 13 May 2013, 14:00 CAT
MILES Sampa says he is happy to have been part of the formulation of Statutory Instrument 32 that seeks to plug income leakages Zambia experiences through tax avoidance and transfer pricing. And Sampa says he had requested for a transfer from the Ministry of Finance, which President Michael granted.
Sampa was last week moved from Ministry of Finance to commerce in the same portfolio of deputy minister to swap with Chilanga MMD member of parliament Keith Mukata.
"I am very grateful to President Sata for considering my request for a transfer. I am very ready for new challenges at the Ministry of Commerce," he said.
And Sampa said the formulation of SI 32 to guide the implementation of the 2013 amendments to the Bank of Zambia Act would help Zambia stop losing income through tax avoidance, income leakages and export trade anomalies.
"… This SI is just doing the obvious that also happens elsewhere whether its Europe or United States and even in Africa…its only that we have gone a step further in trying to stop income leakages, transfer pricing and tax avoidance," Sampa said.
He said SI 32 did not seek to compel foreign investors to deposit their pledged investment into a local bank but that the government wanted to ensure tax incentives provided for under the Zambia Development Agency (ZDA) were not abused by unscrupulous people.
"We are not saying they should bring all their money, no! What we want to achieve is to create a monitoring mechanism to ensure that we monitor that the money or equipment for which we gave these investors tax concessions do come into the country," Sampa said.
"So, this reference account to be domiciled with a local commercial bank is just for the purpose of auditing because these tax incentives can be up to 15 years. We are not saying they should bring all their money here."
He said the introduction of SI 32 was consistent with global trends as countries tightened income loses from multinational corporations via transfer pricing and tax avoidance, among other practices.
"In Zambia, we are our own enemies. Anybody who puts Zambia as number one priority will welcome the theme behind this SI but those investors or traders who put Zambia as number two priority will have a problem with it as they think Zambia should always disadvantage itself in the name of free market economy," Sampa said. "We have tried to channel all transactions above $10,000 via banks because banks keep records for at least 15 years."
He said investors needed not seek permission from Bank of Zambia or any other government agency for them to import or export save to ensure that proper documentation and transaction trails are in place through their commercial bank.
And Sampa yesterday handed over a KR340,000-worth ambulance purchased through the Constituency Development Fund (CDF) to Chingwere Referal Clinic to service his constituency.
Handing over the ambulance, Sampa said he was determined to improve the living standards of people in Matero.
"Lusaka district has only four ambulances that service the 28 health centres in the district. However, with efforts like this one we are witnessing today, this shall be a thing of the past," he said.
Sampa said his office would also purchase graders and trucks to repair roads in the next three months.
"In Matero, we believe in doing things on our own. As we wait for the government progammes to develop the nation, we will continue carrying out development programmes in our constituency," said Sampa.
And 82-year-old Matero resident, Roy Chileshe said transportation of patients had been a problem, saying the purchase of the ambulance was therefore timely.
"If all MPs can utilise CDF like this, it would be nice. This is the time our nation should move forward," said Chileshe.
Labels: KEITH MUKATA, MILES SAMPA
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