WE find it strange that we can default on US$42 million interest payment when the government has consistently been telling us that we have enough reserves. This failure to meet our financial obligations means those reserves have been wiped out or the government lied that we had reserves at all.
We are reminded of a TV interview where the PF Media Director, Mr Sunday Chanda, was asked why the country’s reserves were depleting and he responded by saying: “What’s the point in having reserves when you don’t have schools and hospitals”. That is the reasoning of the PF government.
If we don’t have anything in the reserves at the moment, then we have a very big problem. We need reserves to caution us in times of calamity. It is strange that our government doesn’t feel moved about this crisis. We need our leaders to wake up because things are now getting out of hand. If we don’t have any reserves and we also don’t have any balance of payment support coming through from anywhere, then we wonder how our civil servants will be paid in the coming few months.
This development now exposes us to huge risks because if, as a country, we are failing to pay US$42 million dollars, it means our problems are bigger than our eyes can see. If we are failing to settle this ‘small’ amount, yet we claim to have in excess of US$1 billion in reserves, then it shows that we are a deceitful nation. Our people deserve the truth; if we don’t have those reserves anymore, at what point were they wiped out?
If we don’t have US$42 million to spare, then it means we will not have money to stabilize the kwacha. Once we fail to arrest the free fall of the kwacha, we will be in the fast lane towards the Zimbabwe situation. What is happening now is that there is panic and desperation for the dollar among financial market players. We see a situation where they are mopping up the few dollars, thereby plunging us deeper into an economic malaise without any foreign exchange. Investors are increasingly becoming worried about our economic stability and we are now becoming a risky nation to invest in.
Look at the kwacha’s free fall! Who would have thought that in just a few years, our currency would be racing towards the value of toilet paper? This is embarrassing. What is even more embarrassing or rather annoying is that our leaders keep insisting that this trend is global. Every crisis, the answer is global. The Vice-President even said once that the kwacha was not depreciating, but it is the dollar that has gained value.
We also need to start asking questions around why President Lungu fired the Central Bank Governor. Obviously, the issue of incompetence cannot stand because, as everyone can see, the situation has not gotten any better with the new Governor, instead it is getting worse. So what did Dr Denny Kalyalya say about our fiscal and monetary policy that did not sit well with the Executive? We need answers.
During Margaret Mwanakatwe’s reign as Finance Minister, we were told that the country was now keeping gold in reserves at the Central Bank. Where is the gold to save us this humiliation? There is cause for serious worry with what is going on in our economy. We now have a Minister of Finance who just exists on paper without any money. We have a Finance Minister who doesn’t have money but billions of dollars in debt and we might as well call him the minister of kaloba.
We have said on several occasions that this appetite for borrowing under the PF government was going to get us in trouble, but no one seemed to care. Here we are now – in hot soup! Like former Attorney General Musa Mwenye rightly observed in his comment on the country’s debt position, if we did not buy the fire tenders, that exact amount of money would have been used to avoid the default we incurred last week. If the Zambia Revenue Authority had collected the correct taxes from the export of Mukula, we would have had enough money to pay this embarrassing debt.