By Patson Chilemba
Former Finance minister Ng’andu Magande has told those in the PF to “shut up” as they have no solutions for the problems they created even if the UPND were to be voted out of office.
And Magande said the IMF has failed to provide solutions, and the government must therefore look to other avenues to address the debt problem, including from the local people offering to help.
Speaking with Daily Revelation, Magande said a situation such as the one facing Zambia had never happened before, and the people who made it happen were still there.
“So we just have to tell them shut up! Because you had no solution even yourselves. Even if today UPND was going to get out of government and PF comes they have no solutions for the problems they caused without being in government because they can’t suddenly now be good boys to be able to fly London and go and see the Bank of England,” Magande said. “They can’t. They have already lost reputation. Once you lose reputation as a government, an administration, it’s difficult to gain it. You see.”
Magande said if getting IMF money was proving difficult the government could look to other avenues including the local banking system which he said was awash with liquidity because of things like the release of CDF money, saying he could not imagine that a local bank like ZANACO did not have billions stored somewhere.
He said they could be using such money by lending it to government through treasury bills, but wondered if there was no way the government could have it without going through treasury bills as that came with the requirement for the public to buy the bills.
“Even the banking sector, we should now be hearing them saying in the banking sector now there is so much liquidity. If the government has projects which are viable, which they can do and recover the money within a short time why not talk to them? So really it’s to look for different avenues. But the first one is to ask the IMF, ‘do you know somebody who ended up like this, and because you are the advisors you advised them to do this’,” Magande asked.
He said people were talking about cooperation through the Africa trade area, but wondered how they could be a trade area when people did not even have money to make any commodities for exports.
Magande wondered how countries could even work together when others were in problems, saying in the past, just after independence, Zambia lent money to Tanzania.
“I know that because when we were discussing HIPC, Tanzania was on a list of countries that we had to forgive that debt,” Magande said, adding that Zambia forgave debts from that country and Mozambique to get its own debt forgiveness. “So even now if there is an African country which we know has very good liquidity you go and borrow there because all you are trying to do is to keep on changing the payment period for the debt that you are owing. So you can keep on changing as you move along while looking at local models so that you produce the maize. You produce the fertilizer.”
He continued.
“And better still we shouldn’t just get the deputy MD for IMF and she comes here and we still say we are working out a package. And they tell us, until you finish your package with the creditors then we can’t do anything. When are we going to finish that with creditors?” Magande asked. “I think if the IMF now are saying its you to come up with a solution, because we (IMF) have changed the goal posts, we tell them for us in order to score we think we still need to play 90 minutes. So what do you suggest?”
Magande said if the IMF suggested solutions he would say they were playing their role, but if they are just saying “do something then we will give you this $1.4 billion, what is it that we can do?”
“For me I don’t think that is a solution. It isn’t a solution and if the creditors are being difficult and the IMF are waiting for us to agree with creditors then the creditors are also waiting for the IMF, I think that is what I heard somewhere one of the creditors saying we want to see what the IMF is offering, then it becomes egg and chicken,” said Magande, saying no progress will be made in such a scenario as things were moving around the circles. “The money that we need is for importing things. What are the things that we import now, that we need this foreign currency for? So if some of the big businessmen would be saying no me I use about $1 million every six months. Then you say how much can you contribute yourself? So now you are just dealing with the local market.”
Magande said he was not even sure what the IMF package was, saying he thought the country would know what the same package was when the IMF deputy deputy head was in the country.
He said he was saddened that instead of hearing word from IMF “that if you do this we shall do this”, the talk was still around the $1.4 billion, and that even the said money from the World Bank and ADB would not be enough to cover the budget and all the projects the country would come up with.
Magande said as this was the first time the country was going through such a situation, it would be wise to find another country that has gone through a similar situation to draw lessons on what to do.
“Zambia has never been in this kind of fix, so when these people come like the IMF, World Bank, one would hope they will be saying this country in South America had this problem so what you should do is this. But then now they are saying the kind of situation where we are it’s us to come up with a programme. So one would be saying to the government what programme do you have?” Magande asked. “If they say like I am saying now to say, no this has compounded us, we have never had a problem like this, then you would be saying, but you can go and talk to the Mexicans…Ghanaians then find out what happened.”
He said unfortunately what he discovered while working in the ACP with 71 countries was that countries don’t want to appear like they are consulting others, thinking they could sort out problems on their own.
“And because of that it takes a long time to find a winning formula. Because now all of us are saying without this $1.4 billion from the IMF where do we go and get money? And that’s why sometimes even when you hear about somebody who would bring up an idea, you have to listen and test it,” Magande said. “If Mr Chanda of PPZ is known by the government that yes he’s genuinely mining emeralds, he has an emerald mine and because he submits the returns to the ZRA, (and) they know that he has got $1 billion in an account, why not listen to him? He has offered. He says at least $7million that I can afford I can lend the government. Even the creditors that we are talking about now, we are seeking from to forgive us perhaps 10 percent then the other 90 percent to stagger it over another long period.
“So if Mr Chanda comes and says ‘oh these creditors want to give you another 10 years, me as a Zambian I don’t need this kind of money and in any case I will still be making more by you helping me to continue mining then I will give you 15 years.’ We are already getting an advantage.”
Magande said the people the country was waiting for in the market to give the country conditions on the $750 Eurobond loan were ordinary people, who were as good as “Mr Chanda.”
“So why not try anything? Because we are desperate. We need the money. If we don’t get the money then it means people lose confidence in the government and then they wait for something else to happen. And that is taking us time because now according to the notes I have seen we are talking of October, not even talking of October, we are talking about possibly in October. What if in October it doesn’t happen?” asked Magande. “Why we are talking of October is because in October we have to frame the budget for 2023. Now if October comes and we don’t have that, how will we prepare the budget for 2023?”
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