Liuwa UPND member of parliament Dr Situmbeko Musokotwane has urged Zesco to allow the mines import their own power in order to cushion the deficit which the country is facing.
And Dr Musokotwane says government does not know how to increase the country’s earning capacity but it is specialized in borrowing.
Meanwhile, Musokotwane has noted that the country is unlikely to meet the 2022 Eurobond bullet payment because the allocation to debt repayment in the 2020 budget is “cosmetic”.
Speaking when he featured on Prime TV’s Oxygen of Democracy program, Monday evening, Dr Musokotwane explained that mines had expressed interest in importing their own power but only needed to use Zesco infrastructure to transport it.
“Also, I want to tell you that my committee in Parliament, there was a time when we visited the mines, they told me that ‘if we are permitted by Zesco, we can import our own electricity, the only thing Zesco needs to do is to allow us to move that electricity on their pylons but we can make our own arrangements to import electricity’, whether it’s from South Africa, Congo, I don’t know. In my view, they should be allowed to do so because if they are allowed to import electricity it means that of course they will pay so government doesn’t need to subsidize but of course it means that there will be slightly more electricity that will be available for other people, but for now, the mines, you and me are struggling to get a portion of what Zesco gives us. So if somebody offers and says ‘don’t worry about me, I can make my own arrangements, why should you stop them” So in the short term, I think it’s important for the mines to be allowed to import electricity so that the rest of us can have more,” Dr Msokotwane said.
And Dr Musokotwane said it was unfortunate that government didn’t know how to increase the country’s earning capacity.
“…Basically, what we are saying is that if the economy is bigger, even this debt that appears to be big today will be relatively small. The ultimate solution is to increase the earning capacity of the country but it cannot happen today because our colleagues they don’t know how to boost the earning capacity, there way of bringing money into the country is o borrow, but how do you pay back?” he asked.
He also cast doubt on government’s ability to strictly adhere to the K106 billion 2020 budget.
“The main thing was basically to cut wastage of resources so that money is spent only on the priorities. So all that money that we are using to hold by-elections, we can instead have a joint feeding program in hunger stricken areas. The minister in is budget says the level of borrowing is going to go down, on paper, it looks good but I am skeptical because year in, year out, from 2012 every Minister of Finance in PF, and now the one who is there is the fourth one, they always talk about prudent management of resources, we not going to spend more than what we have, at the end of the year, nothing done. Yes, I am still doubtful, the dropping of the sales tax is good, but the other ones sound good but until they come to pass, I will not believe them,” Dr Musokotwane said.
Meanwhile, Dr Musokotwane noted that the country was unlikely to meet the 2022 Eurobond bullet payment.
“So with that confidence that comes with their statement of approval by the World Bank, even this debt that we have today, it will be possible to do what is called refinancing it or rolling over. In other words, this Eurobond that falls due in 2022, I think US$750 million, we have no capacity to pay it in 2022. The money set aside is just cosmetic…if there is a bill of US$750 million due and you put K600 something million, that will be about US$60 million roughly this year, and another one next year and if we are lucky even the other year, total US$180million, how much are you supposed to pay in 2022, US$750 million. So what is US$180 million compared to the total amount that is due for payment? This is nothing, this is cosmetic,” said Dr Musokotwane.
“What I am saying is that if we generate confidence that now we have got our act together, because the IMF is giving us a statement of approval. We can go out to the markets and say to those people in the business of finance, ‘I have a debt falling due in 2022, I have no money to pay it can you lend me some money that I pay which I can use to pay off this one then I can pay you back in 10, 15 years’, if they think that you are running your country properly, they will agree with that, if 2022 comes, you are not going to default because you have borrowed from A to pay B to save yourself trouble. That will never happen unless we have a program with the IMF or World Bank.”