By Staff Reporter
Former commerce minister Bob Sichinga has described the $1.4 billion IMF facility as a “bridging thing”, saying the country should not be celebrating acquiring a loan when the money can easily be raised through ownership of the mining industry
Speaking with Daily Revelation, Sichinga said the Zambian people have still not been told what the $1.4 billion IMF facility is intended for, and neither does parliament know.
“Is it for recurrent expenditure? Is it to reignite, stimulate the economy? And if it is, in what areas? Or is it to be used to service the debt?” Sichinga wondered.
He demanded that the government open up and state clearly how they intended to use the facility, adding that the bigger problem that also needed to be addressed was how to deal with the rest of the challenges going forward as the country had a deficit situation on the budget.
Sichinga said just the other day, the government t passed a supplementary budget, saying according to Finance minister Dr Situmbeko Musokotwane, the money was received from the lenders which was due last year but it arrived late, saying that that did not remove the deficit that is accumulating.
He wondered if there will be further borrowings from the commercial sector, and whether they would pay for those who have been recruited from the same money, which he said was filled up by cleaners, drivers, assistants in the health sector recruitments.
“Is it to pay those people that they are borrowing domestically or are they going to use part of the $1.4 billion? How are they going to meet the cost of the recruitees? The long term is to find a solution to these perennial deficits,” Sichinga said.
He said the solution was to solve the issue of KCM and Mopani so that money remained within Zambian borders as the money the country was earning was only about six percent from the proceeds of copper.
“Why do we want to sell these family jewels at a give away price? Why? Why are we not holding on to the mines so that all the proceeds are coming to the Bank of Zambia and it can improve our balance of payment? So that it can improve the value of our currency? So those questions still remain,” Sichinga said. “That’s why I said yes it is a good thing that that part has been brought in to help. According to what I know, any borrowings from IMF are for balance of payment support. Now if it is for balance of payment support, are there other measures to reduce on the amount that we are exporting? For instance are we taking some austerity measures to reduce on imports for example.”
Sichinga questioned how sustainable the IMF facility was for the long term, saying as a bridging facility, the $1.4 billion should be explained in detail how it would be utilized for the economy to enable it develop its own resources.
“For the long term sustainability, $1.4 billion is not sufficient on a budget of $10 billion budget facility,” he said.
Sichinga said he would even prefer if the $1.4 billion were invested into the mining operation as the money would be circulating in the economy, wondering why foreigners should come and run the mines when Zambians were capable of running them themselves.
He said the country was capable of raising more than even the $1.4 billion IMF facility if the money that would be generated from running the mines was used prudently. Sichinga also wondered why the government could not borrow money from the open market, which he said major conglomerates like Glencore and Vedanta were doing.
“Why can’t we do that, run the mines ourselves?” Sichinga asked. “For long term sustainability we need to find a better solution. What we have right now is a bridging thing. So we should not even be talking about celebrating. Celebrating what? It’s a loan.”
He said he wanted to hear the measures that government was putting in place to reduce the expenditure and asked where they are going to invest the amounts coming in.
“If I don’t know , I don’t know how they could be said to be transparent. How could they be because I don’t know. And l am saying that government should be open even with parliament and say this is the plan that we have. We are starting from here, we will do this,” Sichinga said.
He said since the government have come to some understanding with the creditors they should tell Zambians the longer term plan until the people know how the whole debt situation would be addressed.
“Even if the creditors are on board, even if creditors have said yes we will give you some breathing space, what are the terms that have been agreed upon? So that the government carries along its people. And now that they have passed that bill on the issues of going to parliament when they are raising funds we want that to be the case. Let them go to parliament and provide those details so that the general public are made aware,” said Sichinga.
