Action Aid Executive Director Nalucha Ziba says the government’s recently-announced austerity measures were mere rhetoric given the lack of concrete action to follow-up on such pronouncements.
Ziba observed that the government’s austerity measures, which were recently announced by Finance Minister, Margaret Mwanakatwe, were mere rhetoric as evidenced by continued rampant spending of public resources on unbudgeted-for presidential and ministerial trips.
“These measures which were given and announced by the Ministry of Finance in terms of austerity measures are not new, they were announced before, the other [former Finance] Minister announced them before, but they were not implemented. They are more rhetorical as opposed to being practical in terms of how we are going to come out of these loans. They need the practical part now and not mere rhetoric. The part for that is gone,” Ziba told News Diggers! in an interview.
“After these announcements were made the President made a trip and the Finance Minister made a trip to Zimbabwe, too. [This is] exactly why we are saying this is mere rhetoric that lacks practical measures. It’s more of a presser to say, ‘we have got a problem and we have accepted that we have a problem,’ and this is how we are going to go about it. And the following day, you start dealing with the problem and the following day, you start spending seriously through trips and other means. So, we need to move from the rhetoric and do something in terms of the measures they are putting in place. I think the measures have been there with the Ministry of Finance for a long time now. You can’t try and fool anyone here; we have a situation currently where three quarters of the budget is going through debt servicing. So, the question now is, how will you grow the economy since anything we get in terms of budget money is directed towards the servicing of the debts?”
And Ziba questioned government’s failure to operationalise a sinking fund and save money aimed at servicing the accumulated debt.
“In terms of the sinking fund, our view as ActionAid is that a sinking fund is a good initiative as it reduces liabilities of government in servicing debts. Government, through the Ministry of Finance, had initiated to introduce and set up a sinking fund. However, the challenge we have recognised is that they have not operationalised this sinking fund. It was also going to be good if government had started depositing money in this sinking fund so that we save money in terms of repaying the debts that government acquired, most especially that we have to pay back the Eurobond in 2022; the [first US $750 million] Eurobond is going to mature by 2022. It would have been a very good initiative to help us service this bond,” said Ziba.
“But also it would have helped to put us on the right track in as far as meeting the IMF (International Monetary Fund) is concerned. For us, this failure by government to set up a sinking fund amounts to lack of seriousness on the part of government and lack of knowing what they are doing because you can’t go and acquire loans of which you have no plan of repaying back. They have no plan, serious plans of repaying back.”