FINANCE Minister Dr Situmbeko Musokotwane says government has acquired a loan from the World Bank meant to build high schools in provinces which were previously neglected.

And Musokotwane says government currently owes Chinese creditors US$5.75 billion.

Meanwhile, Dr Musokotwane says government will not cancel the debt restructuring contract with Lazard Freres because that can cost the country more money.

Responding to questions in parliament after presenting a ministerial statement yesterday, Dr Musokotwane the UPND government would also borrow.

“The UPND government will borrow money. As we stand now, we are negotiating for a loan and I think it is actually signed. This loan is to construct high schools. Madam Speaker, I say so with a very clear conscious in my mind because to borrow money so that high schools are constructed, actually this loan, the first part was incurred by the previous government. In that loan from the World Bank, three provinces were completely left out which were Western, North Western and Copperbelt Provinces,” said Dr Musokotwane.

“So the loan that we have signed, part of it is to say that our colleagues used to choose who to fund and who to reject. In this House, they would say without leaving anyone behind but when in reality they were leaving some people behind. This loan that we are acquiring now is to make sure that those that were left behind will also be uplifted. I have no shame or apologies to make about this because if it was a loan to buy handcuffs or teargas, I would say no.”

And in the Ministerial statement which was read on his behalf by Vice-President Mutale Nalumango, Dr Musokotwane said debt service for public external debt would remain restricted to multilateral creditors and a few priority projects mainly in the health sector.

“The total publicly guaranteed and non guaranteed external debt stock is $14.67 billion as at end of June 2021. Of this amount, $5.75 billion is owed to Chinese creditors. The breakdown of this is $4.27 billion owed by central government to Chinese creditors. $1.34 billion is owed by state owned enterprises including ZESCO on facilities guaranteed by central government while the balance of $139.60 million is owed by ZESCO on the Chinese facilities that were not guaranteed by central government. This debt position includes only amounts drawn and outstanding and principle arrears but will not include interest arrears which amounted to $195.47 million. At the end of the second quarter of 2021, the undisbursed stock of public external debt stood at $4.4 billion,” Dr Musokotwane said.

“Government will adhere to the debt service standstill until an amicable solution is found to our debt situation through good faith and collaborative engagement with our creditors. This means that debt service for public external debt will remain restricted to multilateral creditors and a few priority projects mainly in the health sector. In this regard, a total of $7.67 million was paid in debt service between the end of March and end of June 2021 to this group of creditors.”

Meanwhile, Dr Musokotwane said government would not cancel the debt restructuring contract with Lazard Freres because it would only cost the country more money.

“We just advise that where your colleagues left, you pick up from there. And indeed, just like they picked up from the MMD of external debt of less than $2 billion and took it now to almost $15 billion currently. So yes, we take over from where the last person left and you move forward either making progress or unfortunately, certain cases create problems. In this particular issue that you have raised, the advisors are already there and money has been paid for those advisors,” Dr Musokotwane said.

“In those circumstances, what would be the point of breaking the contract and taking each other to court? There is no point. We take it up from where you left it, money was paid and we will not break the contract and we will move forward. The contract to hire the experts is already running and it was incurred. Even if we were not to decide that and cut the contract that will just cost the country more money so we move forward.”

Dr Musokotwane said a law would be enacted in order to compel Parliament to approve loan contraction.

“Agreement with the IMF, maybe before the end of the year. In the new quarter next year, we will engage the creditors to negotiate on the kind of debt relief that is required for the IMF and all of us to say if this relief is given, Zambia can now again run its affairs like a normal country. So the target debt for agreeing with the creditors is sometime next year but the condition for that is to get some agreement with the IMF. The creditors need assurance that if they give you that relief, you will be able to service their debt consistently. The IMF is like the referee who gives the stamp of approval that we believe that yes, if you assist them, they will be able to stand on their own,” Dr Musokotwane said.

“There was a legal safeguard but using the arrogance of numbers, those safeguards were overridden. So that commitment Madam Speaker, is very important because after all, the law that exists today for borrowing is the same law that existed before the last government came in office. The previous government, being committed to good governance, restrained themselves. So I can assure you Madam Speaker that this government will not just depend on laws but it is the conscious to restrain itself. That is the intention to follow what the constitution says which is to enact a law that will give this House power to say yes or no to proposals for loans. So that is part of the reform programme and it will be done.”

Dr Musokotwane said it was sad that the previous administration opted to invest in tools for tormenting people rather than key sectors.

“In every situation, there are some things that are acceptable and others which are not. If I take into example the issues of electricity, I do not think anyone of us in here would argue and say it was wrong to borrow money for electricity, it was correct. Of course we can question the amount of money that was spent on loans but certainly not with intention. There were areas where given a chance, I would have not agreed to spend money on such kind of things. If you go to the government area, you will see a number of office blocks, quite a lot of them, I would not have agreed that we go all the way to China to borrow money to put up an office block especially at a time when there were so many high schools all over the country that were left at 10, 20 or 30 percent incomplete. The future of the nation is in the children. I still maintain that is a wrong priority,” Dr Musokotwane.

“I would also question the new airport in Ndola, almost $400 million. Not that Ndola has no airport, the only problem with that airport is the terminal building. Surely, 10, 20 or 30 million Dollars would have been enough to upgrade that airport and the money would have gone into colleges, schools or hospitals. Now tell me, there in Ndola, what tourism are you going to attract? There is no game park or falls so what is purpose of that? There were many others which were highly undesirable including those items, Madam Speaker, which were purchased to come and torment, harass and intimidate the Zambians. We all recall a long convoy of very aggressive looking vehicles when at the same time police posts like those in Kalabo, the only motor vehicles they have is a Land Cruiser which is about 12 years [old].”