ALLIANCE for Democracy and Development president Charles Milupi says PF’s continued desire to acquire more debt will cripple the economy.

Commenting on a News Diggers investigation which revealed that Zesco was seeking to acquire a loan of about 1.7 billion Euros from foreign commercial entities, Milupi asked Zesco to explain what they intended to do with the loan.

“Zambia is in a debt crisis! With regards to Zesco, Zambian people have not been told what they are going to use the money for. Secondly, whether there was any project analysis to determine whether we need to go into that type of project or whether they just want to borrow money for consumption to come and support their operation budget, which is so ridiculous. So ordinarily, if you are running a big organisation in terms of project procurement, my experience in this sort of thing is that the people asking for projects, they need to carry out an appraisal that justifies that project in terms of what it is going to do for the organization,” Milupi said.

“In other words, what is it going to add to the bottomline. When you look at the value of the project, you now look at the addition income that you are going to get and then you work out how many years it’s going to take to pay back that particular loan. The payment is arriving at the additional revenue you are going to generate as a result of embarking on that. I am not sure that they are doing that and if they are doing that as an organisation.”

Milupi warned that acquiring loans from commercial entities had major consequences.

“I think we have been beaten twice by getting money from commercial entities because these people don’t forgive. We told them in 2012 that these people don’t forgive. So Zesco has to be very careful. The other point is that Zesco is a parastatal entity, when you borrow, it gets added onto the sovereign debt, the national debt. If you look at the amount you are talking about over $2 billion, can Zambia really afford to have $2 billion added to their debt? Can we afford that? So government has to be very very careful how they get involved in this deal,” Milupi warned.

“I have said the accruing of this debt was fueled by corruption. In other words, there were no appraisals that were done that needed that project. Because there is something in [it] for other parties, the party in government or officials. Our experience is that people are embarking on projects that are unnecessary, that don’t add to the organization and certainly have no pay back. That is why when you have people reviewing this procurement, they really have to be upright. There are certain procedures that you go through when appraising projects starting with the financial and technical and so on.”

Milupi warned the PF government to slow down on acquiring debt as it would cripple the country’s economy and make it difficult for the upcoming government.

He hailed News Diggers for its tremendous work in informing the public about the project.

“How Zesco is operating, it begins to worry some of us. We are in the middle of the rainy season, heavy rains are pouring but we are load shaded. There will come a stage that they will be spilling water because they will be an overflow. They are not applying their technical minds. When you load shed, it means people are not paying. So Zesco cannot embark on such a project without the party in government saying so. They are coming to the end of their period in government. Why are they embarking on such things? They have already had their fingers burnt in terms of debt. Why are they still encouraging parastatals to go for even more debt? What do they want the money for? Other than to cripple the incoming government that will come in 2021, that they should have so much now in terms of debt so that this country becomes ungovernable. They must slow down!” said Milupi.

“The Constitution is very clear, they must go to Parliament, debate it and find resources. When you procure that loan, what is the collateral? In other words, when Zesco fails to pay what is this country going to lose? All these things need to be answered. So I am glad News Diggers! are doing a tremendous job to highlight these things, but ultimately, if PF loves this country, let them slow down in doing these things like this, because they are going to engulf this country to such an extent that whoever comes in as a new government, they will find that their hands are tied.”