Massive loan repayment will hamper poverty alleviation – CTPD

Centre for Trade and Policy Development (CTPD) Executive Director Isaac Mwaipopo says the failure by Ministry of Finance to give consistence information about the status of national debt is what creates doubt among Zambians that government is hiding some figures.

Speaking in an interview with News Diggers! Mwaipopo noted that citizens were now depending on international organisations such as the World Bank and the International Monitory Fund to provide them with accurate information regarding the extent to which the country indebted.

“It’s very good that the Ministry of Finance has been making efforts to engage with the public and provide information with regard to debt. The very fact that citizens have been raising concerns regarding debt levels shows how big a problem it is in our country. This is more especially because if you look at the current budget, a large chunk of the budget goes towards paying wages and a larger percentage goes towards paying back debt and we have a smaller percentage going towards public investments. So this is a serious worry if we have a smaller percentage going towards investment, it means that you create less opportunities. It means that you will also have a challenge in dealing with the challenges that we are facing in our country among which include high levels of unemployment and high levels of poverty,” Mwaipopo said.

“So one of the things which the ministry might need to do is to engage more and ensure that the information that they are giving is consistent. The failure to give information that is consistent is partly the biggest contribution towards a number of people thinking that there are some figures that are not being shared with the public and the problem might be bigger than what we know.”

He said the fact that people were raising questions about the status of the national debt, showed concern that citizens wanted to be part of the governance system.

“Secondly, we are now living in a time where a number of citizens are now beginning to depend on foreign organisations or international organisations such as the World Bank and the International Monitory Fund to provide information in terms of the extent to which this country has got debt. So there would be need to step in because that is a gap, to step in and begin to provide information to ensure that everyone is on the same page. And they must need also to appreciate the fact that the general public is raising questions, it means that the public in concerned, it means that the public wants to get involved in the governance of the country and that should be a plus for any health democracy or governance system. There is need to have the by-in of the participation of the locals and if you have the locals asking such questions, then it also means that we are making progress on ensuring that there is inclusivity in the conversations around planning for national development,” Mwaipopo said.

Meanwhile Mwaipopo agreed to the findings by the African Labour Unions Network that there was a growth of Chinese investment in most of the African countries.

“I can also confirm that there is growth in terms of Chinese investment in a number of African countries and Zambia is not an exception. And from these investments that are coming through, there is also need to re-look at how they are structured. In many cases, they are structured in such a way that the government more especially in the case of Zambia will have to contribute a smaller percentage and the other amount is a loan that will have to be paid back. So if these investments that are coming in, let’s say in the construction sector are resources that are being loaned out to countries, there is need to ensure that there is prudent use of some of those resources. Some of the investments are not actually loans,” said Mwaipopo.

“They are actually foreign direct investments that are going into sectors like mining. So there will be need to just ensure that our policies are properly aligned and they have provisions that can ensure that we clearly monitor the kind of investment that is coming in but also ensure that we maximise benefits through having a proper and effective tax system in place so that in an event that some of those investments are closed down, the country will still be in a position to carry on.”

         

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