ZAMBIA’S current economic status is beyond political lines and requires engagement among all stakeholders for the country to recover, says UPND spokesperson Charles Kakoma.
In a statement, Wednesday, Kakoma urged President Edgar Lungu to shelve his countrywide campaigns until next year to deal with the country’s debt crisis.
“What is happening in our country does not inspire confidence, but we are still hopeful that together, as citizens, we can mitigate the negative impact of our failure to repay the loans recklessly contracted by the Patriotic Front government. No amount of gymnastics will salvage the country – this is a non-partisan issue. The Church, political players, Civil Society Organisations (CSOs) and other stakeholders should come around the table to chart the way forward in the best interest of the country. If we don’t take urgent remedial steps, the lenders may be forced to take legal options, which will further damage the country’s standing, considering that we are already graded as ‘junk status’ by international rating agencies. Our failure to provide a sustainable and achievable recovery plan will lead to an increase in interest rates, meaning the country will eventually have less money towards the provision of critical social services, such as health, education and agriculture. Mr Lungu, for once, shelves off your campaigns for next year’s election so that together we can discuss and find solutions on how to deal with the ‘elephant in the house.’ We, in the UPND, believe that Zambia is greater than all of us and we commit ourselves to a better and prosperous Zambia. Let’s engage,” Kakoma stated.
“We, in the UPND, would like to implore President Lungu to provide leadership at a critical time, such as this one, when the country is going through very difficult times precipitated by government’s failure to pay a US $42.5 million coupon on Eurobonds after the expiry of the grace period on November 13, 2020. At a time the Head of State is expected to inspire the country by coming up with a credible financial recovery plan following our crippling debt situation, Mr Lungu is instead busy campaigning for his re-election in the 2021 general election. Last week, Mr Lungu was in Eastern Province for a six-day tour to mobilise support for his re-election, while the creditors, especially bondholders were expectant of a credible recovery plan from his administration for the management of the crippling debt.”
He wondered whether President Lungu’s priority was self-preservation at the expense of the country’s economy.
“While Vice-President Inonge Wina was assuring but misleading Parliament on November 13, 2020, that Zambia would not default on its sovereign debt, her boss was busy campaigning for his party and himself in Central Province! Perhaps the question that begs answers remains whether Mr Lungu and his government are keen to address the debt problem. It seems their priority for now is self-preservation; retaining power at any cost as the country’s economy is crumbling without recourse. The Patriotic Front government knows that the International Monetary Fund (IMF) has a programme that can offer relief to our situation, but they are reluctant to meaningfully engage the Fund due to its requisite demands on accountability, openness and good governance. However, like UPND president Hakainde Hichilema advised last week, we firmly believe that the IMF programme can earn us credibility and credit worthiness again, which has waned over the past weeks as bondholders were considering Zambia’s proposal to get a six-month interest repayment holiday on the Eurobonds,” Kakoma stated.
“The country is bleeding and Mr Lungu and his friends in the Patriotic Front should stop massaging their egos and instead confront the issues concerning the debt. The surge in defaults, like the country has done on other commercial lenders, could lead to challenges in coming up with loan repayment restructuring efforts. The majority of our people, who everyday pay taxes and work hard to feed their families, will be hit the hardest due to arrogance and lack of leadership exhibited by the Patriotic Front. This is not a partisan issue, but a national challenge that requires level headedness and honesty in addressing it. Last week, president Hichilema advised the government on practical and unambiguous measures that should be considered to help the country retain some credibility with the financial markets. These included, transparency about the country’s total exposure to debt, scaling up engagement with all creditors, especially the bondholders who feel that the level of engagement has so far fallen short of their expectations and the revision of the 2021 budget, which is heavily dependent on external support. About 46 per cent of the 2021 national budget, which is currently under consideration in Parliament, is expected to be financed by external lenders.”
And he demanded that Zambia’s economic crisis be treated with the urgency and seriousness it deserved.
“We demand that this crisis facing our country should be treated with a lot of urgency and the seriousness it deserves before the country degenerates further. We also demand that Finance Minister Dr Bwalya Ng’andu should give a clear picture on the status of the Sinking Fund, which would ordinarily be used to pay off creditors. On November 18, the Finance Minister told the country that he had no idea how much had accumulated in the Sinking Fund and yet there were previous reports by the previous finance minister Margaret Mwanakatwe that there was US $10 million and K636 million in the account since the establishment of the Fund under Statutory Instrument No. 75 of 2018. For Dr Ng’andu to say, ‘he doesn’t know how much is in the Sinking Fund when the Fund is specifically provided for cash from our mineral wealth to be deposited in the Sinking Fund to pay components of Eurobonds, is mind-boggling and frightening about the kind of leadership the country is faced with,” stated Kakoma.