On 28th April 2013, we cautioned that if the PF does not monitor the utilization of the US$750m Eurobond, Zambia risked falling into a debt trap. On 28th November 2013 we would further caution the PF against increasing the debt ceiling as this demonstrated their appetite to borrow beyond the state we were left by UNIP. Seven years later, Zambia under the PF has issued a distress letter to the lenders of the Eurobonds to freeze payments until 2021. The total amount Zambia has failed to pay is in the region of US$237mn i.e 4.5% of the current national budget at current exchange rate.
This amount the Government is failing to pay would have been paid had this money been properly invested and properly accounted for. Zambia’s economy did not start to fail now because of COVID19, growth has been declining from 2018 until now in 2020 when the economy is actually recording negative growth. Rightly so, the PF must reach out to the IMF, for a programme, something that they should have done in 2016. But against better advice they accused us of parroting for imperialist institutions like the World Bank and the IMF. This Government is in fire-fighting mode throughout and this explains why the economy has failed.
This is what we suggest to the PF, get on a programme with IMF where they will suspend all capital projects because at the rate the PF is going its highly doubtful that they will get assistance from the COVID19 rapid relief window. Our problems are not anchored on COVID19, the are deeper than that. PF needs a solid IMF programme with clear benchmarks under IMF regular programming which will include fiscal adjustments, sustainable debt management strategy, suspension of capital projects and improve on accountability. But as usual the PF is trying to use the backdoor, so that the money released if interest payments are suspended, they hoodwink the unsuspecting voters in splashing money meant for the productive sector, on consumption and vote buying in 2021.