MINISTER of Finance and National Planning Dr Situmbeko Musokotwane says Zambia is still “broke” and the reason why government is able to do whatever little it can is because many creditors have allowed default.

And Dr Musokotwane says discussions on how Zambia’s debt can be restructured will soon commence between government and creditors, through the IMF.

In an interview, Monday, Dr Musokotwane said the country was still very broke.

“People don’t believe it but the point is that this country is very broke. The only reason why we are able to do whatever little we can do is because many of the creditors, in other words, those that we owe money to, have given us permission to default. So we are not paying as much debt as we ought to pay because many of the creditors have either agreed or resigned to the fact that we cannot pay them now,” he said.

And Dr Musokotwane said restructuring the country’s debt remained key in reviving the economy.

“So the first thing that we need to do or what we are doing to revive the economy is to restructure the debt. Because without restructuring the debt, there is nothing that you are going to do or very little that you are going to do. It becomes hard for the government to spend money that it is ought to on social services. It becomes hard to attract investors because investors are reluctant to go to a country that is into debt. So this is the very first step and this step must not be underplayed because it is the core of the economic problems that this country has inherited in 2011. This problem of debt is one that led to the exchange rate being where it is today, from the K5 per dollar, where the PF found it, to where it is today, that has been caused by the debt. So don’t underplay the efforts that are required to get the country out of the debt situation. It opens so many routes to economic recovery,” he said.

“You need to go through the corridors of the IMF in the sense that they are the ones that the creditors, whom we owe money, they are the ones they trust. That if they lead discussions to help Zambia restructure its debt, the creditors will be willing to listen. Our colleagues travelled for years and years to get to an IMF programme, but they failed. With us, being within six months in office, we got the programme. Right now discussions are about to start between the Zambian government and the creditors through the IMF on how Zambia’s debt can be restructured.”

Dr Musokotwane assured that the exchange rate would soon stabilise.

“The exchange rate is something that behaves like any other market, it goes up and down. If you go to the market to buy fish or buy chicken or whatever it is, the price moves from day to day. So for now yes, the exchange rate has edged upwards but remember a few months ago it was coming down. So don’t be worried to think that because today it has gone up, then it shall continuously be like that. It’s not going to be [like that]. This exchange rate will start rising, it will not move in the manner we saw before, it will not happen like that. That I can guarantee you will not happen. This exchange rate will not be moving up and down like a yoyo in big magnitudes like what we saw in the last 10 years, but minor movements like what we are going through right now within a month. Yes it will go up but it will also come down. You have also seen that in spite of all this, inflation is also coming down,” he said.

Meanwhile, the Finance Minister revealed that the national development plan was being finalised and would be made public before the end of the year.

“Regarding the national development plan which is about almost everything, it is about education, it is about health, it is about the economy, it is about water; everything. That plan is being finalised now, I think before the end of the year maybe by October, September, the plan must be ready to be delivered to the Zambian people,” said Dr Musokotwane.