Tag: minister of finance

Debt

Debt Featured

We think it’s mischievous to say all benchmarks have been met when the IMF statement clearly sets out conditions to progress with the disbursement of US$188 million subject to financing assurances from debt restructuring.

How can they say all benchmarks have been met when there are outstanding conditions set out in the IMF statement? How can one be confident of the outcome when there are preconditions that have still not been met?

While we support the speedy conclusion of debt restructuring, we are not confident because the Minister of Finance has made numerous statements and given timelines in which they were expected to conclude the issue – timelines that have come and gone. How can one be confident when they keep changing timelines?

Secondly, the issue of debt restructuring being a panacea for our economic challenges is being amplified.

Over the past two years we have not been servicing our debt, so where have the savings gone? Once debt restructuring is concluded we will have to start paying the currently suspended debt, meaning we will have less money than we have had in the past two years. Will this solve our economic challenges? The answer is a categorical NO.

The real solution lies in formulating an internal system; an economic recovery plan focusing on industrialisation, expanding our existing manufacturing capacities – and introducing new ones – sound agriculture policy, reviewing tax waivers provided to the mining and other sectors, and energy sector reforms, among other things.

What is needed is to adopt a non-favourite child policy; to treat all creditors the same and engage with each credit category on a bilateral basis, in addition to the G20 Common Framework.

Fred M’membePresident of Socialist Party Zambia

What has become of the UPND strategy to fix the economy?

What has become of the UPND strategy to fix the economy? Featured

What has happened to the strategies that Mr Hakainde Hichilema had on maize meal, on our staple food? Did they really know what they were saying?

We are truly in a crisis. And the desperate measures to address the mealie meal shortages won’t do.

The issuing of a Statutory Instrument by the Minister of Finance removing duties on the importation of mealie meal is a really desperate measure.

The real issue that needs to be addressed is maize parity pricing in the region. Our maize is too cheap in comparison to other countries in the region so the pressure of our maize leaving the country will always be there.

If, for instance, we allow regional market prices to prevail in Zambia then the issue of smuggling will be mitigated. However, the consequence of that is that mealie prices will sky rocket to K400/500 per 25kg bag, which the government knows can cause civil strife.

Despite duties being waived, the imported product will almost definitely land at a higher price than local product. A 25 kg bag of mealie meal in South Africa is presently retailing at R240, so add transportation and insurance costs and also financing costs from the banks, and the landed costs will be around K300.

Even under this duty waiver, the export pressure given highly lucrative prices in neighbouring countries will still incentivise the smuggling of the imported mealie meal.

Sadly, the Food Reserve Agency (FRA) stocks have been depleted due to careless release of the maize reserve and, as alluded in my previous articles, we do not have a fallback position.

The challenge the government is faced with here in summary is twofold: trying to control or influence price and secondly, maintain steady supply. Now the laws of supply and demand dictate a price jump should supply lag. So we are caught between a rock and a hard place. Stabilise supply by increasing prices and people will react, increase supply at depressed prices and smuggling will continue with shortages persisting as a result.

Conclusion: it is unlikely that the Minister of Finance’s Statutory Instrument will help solve this problem until parity price in the region normalises.

Fred M’membe
President of the Socialist Party

Statement of the Socialist Party on the Zambian government’s failure to honour its debt servicing obligations

Statement of the Socialist Party on the Zambian government’s failure to honour its debt servicing obligations Featured

On September 22, this year, the Minister of Finance announced that he had made a request to bondholders to suspend debt servicing for six months because Zambia was not in a position to meet her debt servicing obligations due on October 14, 2020.

As you may be aware, 40 per cent of bondholders immediately refused to grant Zambia debt servicing suspension.

The Zambian government had hoped that when 60 per cent of bondholders met last Friday, which was the last day of the one month grace period given to pay from the initial due date, the bondholders would agree with their proposals. But they too refused.

Consequently, Zambia officially became the first country in Africa to default even if it had already defaulted on other unknown Chinese debt obligations.

As the Socialist Party, we are concerned with the lack of seriousness from the Treasury when dealing with these important issues. We have plenty human resource that we have invested in as a country and worked at the highest level at of both the International Monetary Fund and the World Bank. It is an embarrassment to the nation that the Minister of Finance lied to the nation about his engagement with bondholders only for them to issue a statement the following day that there had been no direct contact between them and the Zambian government.

Why did Dr Bwalya Ng’andu lie to the nation? Is he covering up on the debt that was borrowed under the cover of darkness?

They say, ‘You can run but you can’t hide…You can fool some people all the time, but you can’t fool all people all the time.”

Reality has finally dawned on this Patriotic Front government.

What the international community is demanding is transparency on the Chinese debt obligations. The demand by the Minister of Finance through his representatives that bondholders should sign a non-disclosure agreement before he discloses the extent of Chinese debt and the conditions attached thereof should be of interest to every Zambian because this is public debt which you will all pay for.

As the Socialist Party, we wish to announce to the nation that the reason why this government has since 2016 refused to open it’s books to the IMF on the Chinese debt is because that would reveal the Patriotic Front’s massive penchant for bribes. Most of the loans have inflated figures because of amounts a few greedy individuals collected as ”facilitation” fees. The International community is well aware of the extent of corruption and are now collaborating with bondholders to expose how corrupt this government is.

Once that information on the Chinese debt is given, it will reveal how much money was shared and by who. At the moment, Ministry of Finance officials have been struggling to balance the figures before the IMF team comes in.

Dr Ng’andu must not continue protecting criminals. There is no place for them to hide anymore.

Dr Ng’andu has two options: It’s either he reveals the actual figures of the Chinese debt and Patriotic Front goes down so that we can protect our economy or he lets Patriotic Front continue hiding their nefarious acts and we all go down.

Dr Ng’andu has to make that choice because time is of essence. Thankfully, since we cannot demand accountability and transparency from the powerful politicians and their fellow gangsters outside government, a far more powerful group has come to our rescue.

Lelo balasebena ba pompwe mushibila nsala!

Issued by Fred M’membe on behalf of the Politburo of the Socialist Party Garden Compound, Lusaka