FINANCE and National Planning Minister Dr Situmbeko Musokotwane says discipline is more important that capacity when it comes to managing public resources.
And Dr Musokotwane has hinted at the upward adjustment of fuel pump prices, saying the prices of petroleum products on the international market are going up, therefore maintaining the current local prices would be unsustainable.
Dr Musokotwane was speaking when he featured on ZNBC’s Sunday interview programme.
Asked if constituencies had the capacity to run efficient procurement systems, Dr Musokotwane said there would be some teething problems but they would be overcome.
He also said discipline was what was needed the most.
“Yes and no, but you ask the question, was there capacity in the central government, was there a capacity for example under DMMU to come and repair a roof that has blown off in Liuwa? Clearly, the answer was no. It wasn’t there. So there will be some teething problems but those will be overcome. I must also say that we are going to have to do a lot with our staff in the councils. Some of them are not helpful. Those are issues that we are going to have to deal with, just commitment and discipline to work. It will be sorted out, people will have to be accountable,” he said.
“If there is money coming to the constituency and that is not being utilized, we will tell you and go down heavily. Sometimes here in Zambia when people fail to do their work deliberately, they want to confuse that with capacity. So it is the attitude and discipline. Let’s make a distinction between indiscipline and capacity. Where there is genuine need for capacity, we will deal with that but where there is no discipline and dedication to work, we shall also deal with that.”
And Dr Musokotwane hinted at a possibility of fuel pump prices being adjusted upwards.
“There are the subsidies on petroleum products. You recall that we don’t produce it in Zambia, it is a product that is imported outside the country and the price of this commodity goes up and down. Where we are now, the price last year was about 60 something dollars per barrel and now it is about 84 or thereabout to the barrel, so the price has gone up. So what do we do? Do we maintain the price at the pump or do we adjust? As long as we fail to adjust, then of course it is going to be a problem. It means we are going to be spending more because there is no line budget here for subsidies for petroleum, there is zero. So if we don’t adjust the price, obviously we will end up over spending,” he said.
Dr Musokotwane said government was also having discussions on the possibility of the country importing petroleum products through the pipeline because it was cheaper.
“There is also a discussion with my colleague [the] Minister for Energy on the possibility of importing petroleum products through the pipeline. The pipeline is a cheaper solution compared to bringing the commodity via trucks. That is about three times more expensive than when you use the pipeline. We have a choice as a country. The petroleum products on the international market are going up and we can’t afford to keep the pump prices fixed because then instead of putting into education, into health we are using that money to subsidize the diesel you are buying,” he said.
“What is better, to subsidize your diesel that you put in your car or to put that money into the education of our children, the health? Now that we are short of money and we have to make real priorities, between subsidizing the diesel I use and putting that money into a rural road, paying bursaries for a child, buying medicines, we have to make a choice as the government but I think if we are to make a choice please understand the background to this. So these are the sort of things that have a tendency of derailing the budget, purchase of maize, fertilizer and subsidies.”
The Finance minister assured that government would stick to the budget and ensure financial discipline.
“For us, the target is 6.7 percent of GDP. A deficit arises because you are spending more than what you are collecting from the revenues, so you are forced to borrow to cover that gap. The most important part of that is discipline. The discipline to realize that my budget was so much and I will stick to it. And in the last 10 years, I hate to refer to what happened in the past but that’s the reality, the discipline was limited. And this is why year in, year out there was a promise of consolidating the budget but the very opposite happened,” he said.
“I can assure you that I will do my best and I have the support of the President and of course the cabinet. We will do our best because it is very clear that this thing of trying to spend more than enough of what you have, contrary to the thinking that you are solving problems, you are actually creating problems. So we will attain or be very close to the numbers that we have.”
Dr Musokotwane clarified that part of the borrowed money would be used to pay the first Eurobond which was due next year.
“The external borrowing I think is about 47 billion which is about US$2.4 billion. Some colleagues have been saying ‘you UPND people you have been pointing fingers at the PF saying they are borrowing too quickly but what about you, you are doing the same thing’. So let me unpack that 2.4 billion so that you understand what we are talking about. That amount of money that we are talking about, US$750 million out of that is actually money that we are going to borrow to pay off that first Eurobond which is due next year. So this US$750 is not to borrow for us to spend and pay off. So we are actually refinancing, it is purely to finance the existing debt on the first Eurobond,” said Dr Musokotwane.
“Then there is another US$700 million on top of what I have just indicated. This US$700 million is money that really belongs to us. The money that I said in parliament has been given to us by the IMF free, never to be repaid. If you like, this is like a grant. But in the accounting system that is involved by both the IMF and Bank of Zambia, it is now categorized as financing. Which means it’s like borrowing but in actual fact, we are not borrowing because this is our own money.”