FORMER finance minister Dr Situmbeko Musoktwane has expressed doubt that the debt relief given by the Chinese government will lead to a rebound of Zambia’s economy.
The Chinese government last week granted Zambia a debt service suspension initiative on all concessional facilities.
In an interview, Dr Musokotwane said despite the help from China, the country may continue struggling due to the level of its indebtedness.
“To start with, that thing is something that came a couple of months ago and I do not think it is specific to Zambia. It is the general approach by the government of China to all countries under COVID-19, which more or less matches what the western countries have also done. It is for everybody who owes China. Whether it helps Zambia or not is not clear, but on the other hand, it is possible that inspite of that help, you will still find the country is struggling, because the level of indebtedness was so high that even when somebody gives you help, it still does not help you because you already over-borrowed,” Dr Muskotwane said.
“Let me give an example of somebody who has no food in their homes; they are starving; someone can bring you a bucket of mealie meal, it is help; it will, maybe, see you through a day or two, but it doesn’t mean that hunger is finished or ended in that home.Yes, we have had some assistance, but your natural state is so bad that inspite of that bucket of mealie meal that is coming your way by way of help, within a few days, it is gone.”
He added that the effect of China’s debt relief would only be seen once major economic projects started to operate positively.
”You can indirectly deduce that if we continue to have problems in paying all our obligations, in other ways, we can’t pay our teachers, buy medicines, we cannot pay our arrears, then you know that inspite of the help that the Chinese gave us and the western world, our situation is dire. If it was not, then we will not be having all these payments, all these kinds of problems that we are having. In the next two months, if we still continue to have problems, failing to pay other debtors here and there, failing to run goverment programs then we shall know that inspite of the help from China, inspite of the help we will get from the G20 nations, our situation remains tough,” Dr Musokotwane added.
And Dr Musokotwane said it was disappointing that President Edgar Lungu, during his working visit to the Copperbelt, called and ordered Secretary to Treasury Fredson Yamba to allocate funds for the completion of a school that had stalled.
He said it was clear that the money for the completion of the school was not budgeted for, which indicated that some funds would be diverted.
”The government system knows; the Copperbelt Minister knows, the PS for the Copperbelt knows, and they have been reporting to authorities that there is a problem here. Now why has it been left like that for years? It has been left like that because they were told there is no enough money to cover this,” Dr Musokotwane said.
”If you go around the country, there are so many schools that have been abandoned, including in my constituency. If the President ordered for money to that school to be done, it means that something else is going to suffer because the Treasury has only so much money. So when we tell them to fund this school and there is no money in the budget, it means that they must take that money away from another project in the country. Clearly, the problem is the system.”
He said government’s expenditure was likely to increase in 2021 due to the PF’s desire to demonstrate popularity in some areas in the country.
”There will be a lot of expenditure in 2021, already you can see that. The issue of by-elections, councilors are being enticed with money to resign from their positions. The government wants to demonstrate popularity in the areas they have always considered themselves not to be popular. I am sure you have seen the amounts of money budgeted for defence and security, we have seen the arsenal by the police, we have also seen the huge amounts of money into the fertiliser support program, [which is] well above what we have ever seen in this country. Remember, [when] you overspend in 2021, what it simply means is that in 2022, there will be hardly any money for fertiliser because you spent it in 2021,” said Dr Musokotwane.