HOUSING and Infrastructure Development Minister Vincent Mwale says the K8 billion Covid-19 bond is a special fund established to help stimulate the economy, including infrastructure project, and should not be understood as money raised from Covid donations.
In an interview, Mwale explained that the K8 billion Covid-19 bond was a special fund to help deal with the adverse effects of the Covid-19 pandemic.
He also announced that funds coming from the Covid-19 bond would help finance infrastructure development projects, but added that no cash derived from any Covid-19 donation would be used to fund ongoing road works.
“Part of the Covid-19 bonds funds would be used to pay for road works. Government has borrowed to stimulate the economy. It is just the name of that stimulus package, Covid-19; it is a bond that has been issued to borrow money to stimulate the economy. It is not money meant for fighting Covid-19; it is not donations for Covid-19, it is just a stimulus package that government has put together and this money is being borrowed by way of a bond,” Mwale explained.
“This money is going to stimulate the economy; we are going to pay local contractors. You heard the President (Edgar Lungu) say, ‘we are going to pay retirees’; you heard the President say that, ‘K30 million out of that will go to empower youths,’ we are going to pay local suppliers; it is money that government has borrowed to invest in the economy. You have heard that there is money that will be put up for businessmen to borrow; those businesses that have suffered as a result of Covid-19, they should be able to go to commercial banks and borrow.”
He added that the infrastructure and construction sector had struggled during the Covid-19 pandemic, hence the need for the bond.
“So, only that this bond is called Covid-19 bond. People are saying, ‘it is Covid-19 money’ no! It is not money meant for Covid-19, it is money that has been organised to be able to deal with the challenges that Covid-19 has brought to us, the negative impact that Covid has brought on our economy. As a result of Covid-19, we have seen a lot of business suffer, we have seen a lot of people laid off and the trickle-down effect has been terrible! Even contractors that have not received adequate funding, they have laid off people, businesses have really suffered,” he added.
“Government wants to stimulate the economy so that the wheels of the economy can begin to run. You have heard the Minister of Finance (Dr Bwalya Ng’andu) out of K8 billion, I think K5 billion has been raised. So, it is not Covid money, it is not donations, it is not money meant to fight Covid-19, it is money that is being raised to be able to deal with the challenges that Covid-19 has brought on us. Part of that money has been earmarked to pay for road works as a way of putting liquidity in the economy.”
And Mwale said that the funds, which would be acquired from the bond to the sector, will be paid back by the National Road Fund Agency (NRFA) through funds collected from toll gates.
“That money is not coming free; NRFA will be able to pay it back over time from the money they will raise from toll gates. So, K4 billion will be given, it will go to contractors, and mostly local contractors, so that money remains in the economy. In the long-run, NRFA, which will receive this money and pay contractors, will be able to pay back this money once they collect from toll gates. This will be done in a long period; it is actually a business transaction. People have really misunderstood the situation, it’s just money from the bond to deal with the negative impact of Covid-19. I have seen opposition leaders, even at the highest level, misunderstanding it,” said Mwale.