COMMENT - British Ambassador, himself a neoliberal appointee doing Captain Renault in Casablanca: "I'm shocked, shocked to find gambling going on in here!". What effect did you think the Eurobonds were going to have? And what was this money spent on? Not fuel and agriculture subsidies and pensions. And yet they're the ones who have to pay for this heist. - MrK
(ZAMBIAN OBSERVER) British envoy calls for immediate stop to Zambia’s high expenditure
December 8, 2016
By Mike Riley
BRITISH High Commissioner Fergus Cochrane-Dyet says high expenditure by the Zambian government must not be allowed to continue because the country has been spending more than it can afford.
And EU head of delegation to Zambia Ambassador Alessandro Mariani says 2017 is very promising for the country as new projects are due to come on stream in the new year.
Speaking during an EU-Zambia Partnership media breakfast in Lusaka yesterday, High Commissioner Cochrane-Dyet said the current trajectory of high fiscal deficits and mounting public debt could not be allowed to continue.
According to ZIPAR, Zambia’s external debt increased by 6.3 per cent from US$6.3 billion as at August 2015 to about US$6.7 billion as at September 2016.
“Zambia’s need for economic reform is pressing. It is sad that debt servicing has returned to become a major feature of government expenditure. Subsidies, public sector costs, along with debt servicing, dominate. This cannot continue indefinitely. Expenditure must be reduced and revenue increased. This process will not be easy for the government – or painless for ordinary Zambians,” High Commissioner Cochrane-Dyet told stakeholders at Lusaka’s Taj Pamodzi Hotel.
“For some time, Zambia has been running a fiscal deficit; in layman’s terms – Zambia has been spending more than it can afford. The clearance of external debt that occurred under the Highly Indebted Poor Countries Initiative (HIPC) over a decade ago, has been obliterated by the accumulation of new debt, including three Eurobonds.”
He added that while the EU welcomed the Zambian government’s steps to address the country’s serious economic problems through the “Zambia Plus” approach, he appealed to the government for continued positive engagement to ensure effective implementation of the cooperating partners’ financial and technical assistance.
“For cooperating partners to support Zambia, we require positive engagement from the government as well as other Zambian partner organisations, including those among civil society. It is important that we have access to ministers, permanent secretaries and other senior officials to ensure our assistance is aligned with government policy. Occasionally, it is extremely useful to meet with HE the President himself [Edgar Lungu],” said High Commissioner Cochrane-Dyet, who also stressed that part of the EU member states’ assistance was directly relevant to the government’s economic reform programme as outlined through the five pillars in the 2017 national budget.
Earlier, Ambassador Mariani told stakeholders that 2017 was set to be “a very promising year” with new projects quickly reaching an advanced stage.
The end-of-year joint briefing highlighted, among others, a comprehensive review of the EU’s project assistance during 2016 in various sectors such as the 40 million euros signed for renewable energies on November 28, and a 2017 outlook.
Labels: AUSTERITY, FERGUS COCHRANE-DYET, HPIC, NEOLIBERALISM, PENSIONS
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Inefficient, unsustainable pension system
By The Post
Tue 04 Dec. 2012, 13:10 CAT
We welcome the government's desire to improve the country's pension system and make it more efficient and sustainable. Our current pension system cannot, in so many aspects, be said to be efficient and sustainable. And unfortunately, the worst culprit in all this is the government. The Zambian government doesn't treat its pensioners in a just, fair and humane manner.
It's very difficult for pensioners to get their benefits. Pensioners travel long distances from across the length and breadth of our country to Lusaka to get their benefits. And when they do get those benefits, the amounts are too low to enable them to buy anything of value and sometimes to even go back to their hometowns.
Our pension system is not only inefficient, but also unfair; there is no fairness in it. But without fairness and efficiency, a pension system becomes useless. We say this because we believe that these two ingredients are necessary for a successful pension system. But fairness and efficiency are largely missing from the perspective of development of Zambian pensions as things stand.
We are concerned with fairness because fairness requires a more equitable return to the pension saver, who has been progressively less protected from service providers. Those who manage our people's pensions are not managing them well; the return is ridiculously low. Many pensioners cannot meet the basic needs from their pensions.
Pensions are very important and should be efficiently managed to ensure that pensioners get a reasonable return. It is important for one to have a pension so that when they reach the age of retirement, they will have enough money coming in each month to cover the cost of their bills and allow them to live comfortably. And sometimes, the pension may be the sole income when one gets older and, therefore, a lot of attention needs to be paid to its management. This means that a pension plan needs to be regularly reviewed to ensure that it is growing at a reasonable rate.
This is not happening in our case. Pension money is being invested in things that can be said to be secure but with very low returns. And sometimes the management costs of the pension scheme are too high to allow any reasonable benefit to accrue to the pensioners.
When one looks at the National Pension Scheme Authority, can one really say that it is a pension scheme that can help an individual when they retire? What does one really get from Napsa pension contributions when they retire? Look at the way Napsa funds were being abused to invest in all sorts of useless and sometimes very corrupt schemes.
For some time, Napsa funds were nothing but a reservoir for those in government to draw from to finance their political projects and sometimes other corrupt schemes of their league. Whenever they need money for anything, they simply go to Napsa because the institution is highly liquid. The plight of the pensioner is not taken into account, is not a factor in all this.
It is this inefficiency that is depriving the pensioners of a better return on their pension contributions. A pension fund would be regarded as efficient if it succeeds in maximising financial outputs by the efficient use of the financial resources entrusted to it.
Pension funds, like many other organisations, can be viewed as open systems which receive inputs, convert these inputs into outputs and deliver these outputs to stakeholders. For this reason, pension funds are conceptualised as systems that transform financial inputs into gains or outputs, that is retirement benefits, for members. Efficiency is regarded as a function of internal management. An efficient pension fund should operate at the lowest possible cost and maximise its returns on investments and benefits payable to the retirees.
More effort is needed from the government to ensure that retirees have a better life after leaving work. To achieve this, the government needs to come up with policies that are conducive for the growth of the pensions sector and that are able to foster increased benefits through pension investments. There is need for the government to attach greater importance to the country's pension system because as things stand today, things are not as they should be.
And the long distances that pensioners travel to get their benefits need to be shortened. Pension payments need to be brought as near as possible to where the retirees live. With the strengthening of districts and the creation of new ones, we hope pension payments will also be reasonably decentralised to enable pensioners to get their pension payments as near as possible to where they live.
On this score, the government has a duty to honour its promise to the Zambian people to have efficiency and secure post-employment life for all retired employees and their families.
A promise is a debt that needs to be honoured. It is comforting to hear labour minister Fackson Shamenda reiterate the government's commitment to ensuring that it builds an efficient and sustainable social security system for the country and that there is political will to ensure that pension reforms are effected. The nation awaits anxiously to see what reforms will take place in our social security system.
Labels: PENSIONS
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