Economics Association of Zambia president Dr Lubinda Haabazoka says Zambia should find internal solutions to its debt challenges because getting an International Monetary Fund (IMF) bailout package means acquiring more liabilities.
And Dr Haabazoka says government must find resources and kick start the Gross Domestic Product (GDP) rebasing exercise before the end of the year.
Meanwhile, Dr Haabazoka says EAZ Summit resolutions will be published in due course.
When he was appointed, Minister of Finance Dr Bwalya Ng’andu indicated that he would do what he could to close a deal with the IMF.
But speaking on Hot FM’s Frank on Hot programme, Tuesday, Dr Haabazoka said Zambia should be the last country to ask for credit from the IMF.
“Of course I acknowledge that there are two types of finances. In this case, when you are looking at government financing, you look at debt and own generated resources. Tax resources and non-tax resources. If we are aware that our debt currently stands at US$10.8 billion, that’s foreign debt, is very high, we should be the last persons to seek for help in terms of more credit from IMF because IMF money is also debt. So my view is for us to look at internal solutions and those do not include increasing taxes, they include looking for leakages trying to seal them so that we can enhance the resource base. It is very true that under the current tax models or tax administration systems, all those that we could have captured, have been captured there are a lot of taxes that we have for example, VAT with a lot of leakages. Then we have other sectors that are using various methods not to declare the taxes and I am talking about the mining industry,” Dr Haabazoka said.
And Dr Haabazoka challenged government to find money to kick the start the rebasing of the GDP exercise before the end of the year.
“We challenge the Zambia government through the Ministry of Finance, the Ministry of National Planning to start the rebasing of the GDP. We need to start the exercise very soon. The advantages are that we are going to capture those sectors we do not capture and loosen up on the ratios you know. The limiting factors to debt are ratios, GDP- to -debt ratios. A lot of people say with a GDP that we have and the external debt of 10 billion we should have crashed a long time ago looking at the structure of the economy, but we are not crashing, why? Because our GDP is wrong! Our figures are wrong! That is why we need a road map from government to rebase the GDP by the end of this year,” Dr Haabazoka said.
Meanwhile, Dr Haabazoka said EAZ Summit resolutions would be published soon.
“This week we are sitting down with the research team of ZANACO and during the weekend, we go and compile three documents. One, a document for public consumption in terms of resolutions, the other, document to the government in general and the other document an advisory note to the republican president (President Edgar Lungu). The resolutions are coming. If we are able to organize a conference of this magnitude, what do you think about resolutions? That is the simplest thing that we can do. If they came out immediately, then you should have known that thing was a cooked event but we are digesting what people were discussing,” said Dr Haabazoka.