FORMER finance minister Dr Situmbeko Musokotwane says it is incorrect to attribute Zambia’s budget deficit to COVID-19 because it was caused by debt servicing obligations.

And Dr Musokotwane has urged government to implement empowerment programmes that can remove young people from perpetual poverty, rather than making piecemeal donations.

Speaking when he featured on Diamond TVs, COSTA programme, Sunday, Dr Musokotwane, who is UPND chairperson for finance, wondered why government was saying the budget deficit was as a result of COVID-19 when the huge jump in expenditure was caused by debt servicing costs.

“You are now saying that the current (2020) budget is in trouble because of COVID. I tell you that you are confusing yourself! COVID plays a part, but only a small part. Study the supplementary budget that the Minister of Finance presented, you will discover that there is a big jump in expenditure and the reason for that is because he (Dr Ng’andu) needs money to service the debt and not to buy medicines and so forth. Yes, there is an aspect of that, but the elephant, the big chunk of that is the debt service that you want to pay. If you look at the revenue, the revenue has only declined by about five per cent, but expenditure jumped up, why? He must service the debt. On top of that, surprising this government in the midst of failing to hire teachers, in the midst of lack of adequate facilities for the COVID, go there and say, ‘test me,’ they will tell you, ‘we don’t have enough material.’ Apart from servicing debt, the other priority is by-elections, just last week, there were 15 by-elections, by-elections are very expensive,” Dr Musokotwane said.

Of the K15.01 billion supplementary budget Finance Minister Dr Bwalya Ng’andu unveiled last week, K5.7 billion is earmarked towards debt servicing, representing around 38 per cent of the total budget, while K5.5 billion will be allocated towards expenditure drawn from the COVID-19 bond, leaving only K3.9 billion remaining to fund other government functions.

And when asked whether he would accept being appointed Finance Minister again, Dr Musokotwane responded in the affirmative, adding that he would negotiate the country’s huge debt stock as his top priority.

“Yes, I would accept. What I would do to fix the current challenges, the first thing is to ensure that we come to terms with these lenders that the government has so carelessly borrowed from. We’ve said over and over again, one of the biggest problems that this country is facing today is that most of the money is going out to pay the debt, that’s why we are not able to hire the teachers, that’s why you are not able to provide sufficient money to run the economy sufficiently,” he replied.

He also noted that Zambia lacked sufficient incentives to attract more Foreign Direct Investment (FDI) from either local or foreign investors for them to create the much-needed jobs in the local economy.

“My view is that the incentives that are there, if at all, is not enough, for any type of investor, whether they are foreign, whether they are local, they are not enough. We must also understand that the most important empowerment in the economy is job creation. Job creation is the most important empowerment anywhere in the world and if we do not create sufficient incentives for both the local and foreign investors to create those jobs that are so desperately needed, you are in trouble and, of course, for us in Zambia today, the most important or the most serious problem that we have is youth unemployment. The issue of saying, ‘we don’t want foreign investors,’ it is an important issue, but less as important as creating jobs whether by foreigners or locals. And we are not creating jobs quick enough and some of the few that were there as you know some businesses are closing, so this is gun powder, the issue of youth unemployment,” Dr Musokotwane observed.

He said the fastest way to create jobs for youths was to revive the mining sector.

“For us, as UPND, the most important thing in our minds is to sort out the issue of youth unemployment. In our view, we must focus on those issues that are down to create youth employment and for me, to our part, the easiest thing that we can do today is to revive the mining sector, why? Because the mining sector is such a big bunch, it comes in billions, jobs are created in thousands. In the mining sector, you have direct jobs, you have indirect jobs, contractors, suppliers. If you take care of the mining sector, youth unemployment will be catered for quickly,” he said.

He, however, advised government to avoid playing politics with the mining sector because it remained key to the country’s economic emancipation.

And Dr Musokotwane noted that government should have an all-round youth empowerment approach to eradicate high levels of youth unemployment.

“I don’t mind that…artists need to be supported, that is fine. But what I want to say is, let’s not act like we are panicking, today, we throw something at the artists, tomorrow we throw something at that. What we need to do is to uplift the entire economy to create conditions whereby investors, whether local or foreign, will create that conducive environment so that not just artists, but young people rearing chickens, you can go to a bank, borrow money and do your chickens. Young people wanting to do fish farming, they can approach a financial institution to borrow, do fish farming and so on. If we are going to say, ‘today I give money to artists,’ tomorrow the mechanics will come and say, ‘what about us?’ The other day, footballers will come and say, ‘what do you have for us?’ Are you going to manage that?” wondered Dr Musokotwane.

“So, when you hear me talking over and over about the mining sector, these are the sectors that have the capacity to raise money, generally, because the money now can start going across, not donations, just abrupt donations from government. It helps, but the number of people that you are going to help is going to be limited. Create conditions whereby people on their own can afford to buy cars; they can afford to buy machines on their own because the conditions are good and not what it is today, things are tough!”

Dr Ng’andu’s K15.01 billion supplementary budget is the second successive one after K9.8 billion was approved last year where K6.4 billion was allocated towards both external and domestic debt obligations last year.