VICE-PRESIDENT Inonge Wina says currency depreciation is a phenomenon which is currently happening in most parts of the world but that the kwacha is hit harder because Zambia is heavily reliant on imports.
And Vice-President Wina on Friday told Parliament that the country will not default on its loan obligations no matter the outcome of the meeting with bondholders.
Meanwhile, Vice-President Wina says people should first analyse the Auditor General’s report before concluding the issue misappropriation of funds by government officials.
Speaking during the Vice-President’s question time, Friday, Vice-President Wina said Bank of Zambia senior directors were not responsible for the fall of the Kwacha.
She was responding to Manyinga UPND member of parliament Robert Lihefu who asked why the local currency was depreciating, saying there was speculation that it was being caused by sabotage by senior directors at the Central Bank and failure by the PF government to manage the economy.
“Mr Speaker, the depreciation of the kwacha has nothing to do with the directors at the Bank of Zambia. The honourable member knows very well that this country depends on imports from other countries particularly in the fuel sector, we import from outside Zambia using the dollar not the kwacha. We import fertiliser into the country using the kwacha, we import many other medical supplies particularly during this time of COVID-19, imports in the medical sector have heightened and these are secured in US dollars. So as a result, the demand for the US dollar is pushing the kwacha in another direction. So Mr Speaker, this is a phenomenon that is happening in most parts of the world, not only in Zambia but Zambia is more impacted due to the dependence on imports that’s why his Excellency the President Mr Edgar Chagwa Lungu has emphasised the need to diversify the economy so that exports can be accelerated and Zambia earns more foreign exchange to boost the kwacha in the country so that commodities can be cheaper for our people. I thank you sir,” Vice-President Wina said.
And Vice-President Wina assured the House that the country would not default on its loan obligations in response to a question from Liuwa UPND member of parliament Dr Situmbeko Musokotwane on whether the country would meet the US$42 million interest payment that fell due on October 14.
“Mr Speaker, this country is not ready to default and I can assure the honourable member that Zambia will not default. We are informed in the House that the Minister of Finance was in negotiations with the bondholders. Whatever result comes out of that discussion or the negotiations, the country will be informed and a way forward will be found in meeting Zambia’s obligations to the bondholders and other lenders that supported Zambia in her hour of need. So Mr Speaker, the country is not defaulting,” she said.
And in response to a follow up question by Monze Central UPND member of parliament Jack Mwiimbu who requested a more categorical answer to the earlier question, Vice-President Wina said the Minister of Finance would give a statement over the debt issue.
“Mr Speaker, we are all concerned about the economy of the country but the Minister of Finance will give a statement to this effect. I can also assure the member that this country is not defaulting. I thank you,” she said.
Meanwhile, Vice-President Wina said government was committed to ensuring that issues raised in the Auditor Generals report were addressed.
She was responding to Chimwemwe Independent member of parliament Elias Mwila who wanted to find out whether government was serious about fighting wasteful expenditure.
“Mr Speaker, recently, the Secretary to the Cabinet issued a statement on what measures government is taking to address issues raised in the Auditor General’s report including punitive measures that will be taken against erring officers who are found to have flouted the law regarding public funds. So Mr speaker, there are measures that are being taken to address each and every case that has appeared in the Auditor General’s report that’s the general statement I can give for now. I thank you,” she said.
And in response to a follow up question from Moomba UPND member of parliament Fred Chaatila who wasn’t satisfied with her previous answer, Vice-President Wina said the report needed to be analysed because the money quoted was not always what was released by the Treasury.
“Mr Speaker, this government is very determined to ensure that misappropriation of government funds is done away with including what the honourable member is referring to as COVID-19 funds. The money that is quoted sometimes is not the actual money that was released by the treasury so it’s good sometimes to analyse issues including the Auditor General’s reports to understand what actually transpired. As for the seriousness that this government gives to the stewardship of government resources, that cannot be doubted. Mr Speaker I thank you,” said Vice-President Wina.