Zambia now in a debt spiral – Milupi

Zambia has plunged into a debt spiral because the money borrowed is too vast and cannot be paid back, says Alliance for Development and Democracy (ADD) president Charles Milupi.

And Milupi says is it outrageous and irresponsible for Information and Broadcasting Services Minister Dora Siliya to state that Zambia is not in a debt crisis when the country has already started failing to pay back the money.

In an interview, Milupi said the impact of the debt would be felt by all Zambians and not the government alone, adding that government should, therefore, tell Zambians the truth.

Government added US $1.3 billion to the total debt stock in just a six-month period between January and June this year, and has already put pressure on critical programmes, such as the Social Cash Transfer programme, which has only received less than 30 per cent funding by the end of the first half of 2018 due to government’s huge debt interest payments, according to ZIPAR.

“So, the consequences of this debt will engulf each and every Zambian. So, it is, therefore, irresponsible for Honourable Siliya to come and say that, we are not in a [debt] crisis. That is an insult to all those who campaign against the acquisition of those loans in the first place! In fact, what is happening in Zambia now is that, we are in a debt spiral. That means we get money from one source, fail to pay, then get money from another source, and fail to pay then go to another source. That is a spiral and that is the situation Zambia is going into because the debt we have is just too much and we cannot afford to pay it. The Chinese government, the Chinese people, what the PF must understand is that they are on a mission. They have way over 1.6 billion people and they want land. They want resources to fuel their economic growth. When you deal with them, be alert because you will end up forfeiting your country to them! The PF is not alert to this fact, all they want is to borrow money,” Milupi told News Diggers!

And Milupi said it was outrageous and irresponsible for Siliya to state that Zambia is not in a debt crisis when the country had already failed to pay back.

“I think that’s an outrageous statement considering the situation in Zambia, frankly. A debt situation is not for the Patriotic Front, an unmanageable debt situation is not for the PF, it not an issue for Mr Lungu alone, it’s not an issue for Dora Siliya alone, or Cabinet; it is an issue for each and every citizen in this country, including those that are not yet born. And Zambia has gone through a debt crisis before, and we knew the impact that it had on every citizen, not just in government. And that was just what? It was just US $7.2 billion. And because of that, we had a collapsed economy, we were unable to invest in social infrastructure, in social services like health and education because most of the earnings were going towards the debt and the interest rates,” Milupi added.

“That was a loan amounting to US $7.2 billion. Now for the information of Ms Siliya, those were concessionary bilateral and multilateral loans with very low interest rates. And that is why when Jubilee 2000 and the rest of the world stood up and said, look, we cannot have Zambians and other Africans suffering because they cannot have medicine because they are paying those concessional loans, let’s forgive them. And that’s how all that US $7.2 billion was forgiven and only half a billion dollars was paid. So, we have gone through traumatic experiences. Our economy collapsed, there were queues for everything; sugar, relish, you name it. And yet the vast amount of money was going towards servicing those loans.”

He noted that Zambia could afford to pay off the public debt owing to the country’s relatively small Gross Domestic Product (GDP).

“Now, by their own admission, governments own admission, which some of us are having difficulties accepting whether those are the true values, they are saying our debt now is somewhere $15.3 billion. That amounts to well over 50 per cent of our GDP (Gross Domestic Product), and by the way, we have now gone to a country [Turkey] that is under debt distress to help us pay back these loans by way of refinancing. That is a crisis! Refinancing is ‘kaloba.’ You borrow money and you failed to pay it, that’s a crisis! And then you go to another lender to say, look, ‘take over my debts;’ ‘take over my debts’ means give me money so that I can pay those people and then I will owe you some money, plus the new interest rates. So, the GDP that she was talking about is not even our GDP,” said Milupi.

         

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