FORMER finance minister Dr Situmbeko Musokotwane says government continues to default on debt repayments because if they pay, they will have no money to use for campaigns.
In an interview, Dr Musokotwane said the continued dishing out of money by some ministers was because a major expenditure in the budget was being ignored.
“Government is accumulating arrears, it means that there are new debts following, but those arrears at some point must be cleared. The question is that why is it that the government is refusing to pay the debts? Why is government accumulating arrears? The answer in my view is politics, because if the government was to pay off the debt as they fall due, there would virtually be nothing remaining for the government budget to pay for anything else. If that happens, then the government knows very well that citizens will be very angry. So, the idea is don’t pay now, the money that you save, spend here and there, that is why you see that some of these Ministers are able to dish out money everywhere. That is happening because a major expenditure in the budget, the payment of debt is being ignored,” Dr Musokotwane said.
“For the Zambans, that is just temporary relief, because at some point, these debts must be paid and the suffering will increase. I suppose that what is happening, they want to wait until after the elections that is when you will see more pain. Don’t think that the pain that you are going through now is the maxium no, there is more pain which is going to come when government starts servicing debts. After the election, after government services the debt, the exchange rate will come under extreme pressure, prices will continue going up, to the government, that will be okay to them because you could have voted for them already. We are seeing that people are donating huge sums of money and they are saying that it is change, clearly, there is now a gap between what the citizens are going through economically and what the leaders think is the situation.”
Dr Musokotwane said UPND had the capacity to restructure Zambia’s debt portfolio because the party had experienced members who had been involved in such situations.
“Us as UPND, we know how to deal with that because at least there are many people who are in UPND including myself who dealt with these matters from a long time ago under UNIP and MMD. Those days we didn’t even have the experience but we managed to come out of it. Now that we have that experience we will be able to sort this matter out. The IMF package can still be obtained but the critical thing here is agreeing on a set of policies that the government of the republic of Zambia commits to implement in exchange for an IMF program,” said Dr Musokotwane.
“The delay all this time was because they could not agree, specifically the government has always been paying lip service to the idea of reducing borrowing. They have always refused and IMF has always said ‘your biggest problem is that you are over borrowing’, so the solution clearly must have an element of how will you start reducing getting new loans, if we don’t commit to that then there is no solution that we are going into because we are going to go into worse problems. If the government can have a change of mind, which I doubt, they believe that they are spending money is what can make them win elections. If they can reduce [the rate at which they are acquiring new loans] then the IMF program is possible.”