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Musumali Questions $418m Loan For Roads
DR COSMAS Musumali says contracting loans for road works under the current economic conditions is unreasonable.
And Dr Musumali has challenged the government to release the country’s debt levels and repayment schedules.
Cabinet has approved a $418 million loan from China to rehabilitate urban roads on the Copperbelt and has given further approval for the government to borrow $65 million for the Lusaka water and sanitation project.
According to a Cabinet memorandum, the loans will be contracted from the China Development Bank and the World Bank.
But Dr Musumali, an economist and also Rainbow Party first deputy general secretary, said it was not the right time for road construction.
“Right now, the ability to use that money prudently is diminished. It is not the right time to embark on major road works. It is more advisable to re-evaluate what you are doing and at times even stop at certain levels and get back to those works when the economy is stable. That way, you will be saving national resources and become more effective. But embarking on such works at this time is very difficult because it will make the works expensive and contract management a nightmare,” Dr Musumali said.
He observed that a proportion of the loans would be wasted by injecting them into the market to support the ‘ailing kwacha’.
“When you borrow during an economic crisis like what we have today, a good proportion will be spent trying to support the ailing currency and this is what is happening today with the Eurobond. A lot of money that government borrowed or is earning from external trade is being pushed into a bottomless pit to try and resuscitate the kwacha. Hundreds and millions of dollars have been pushed in on the Zambian market and down there, you have economic actors that are behaving like vultures, they are buying those dollars and stockpiling. That is a waste of resources,” Dr Musumali said.
He said the decisions the government was making were worrisome.
“If Zambians remember, there was a time when government got an extended mandate through parliament to increase the national debt level and with that, government actually still has the flexibility to incur more debt. What we are not sure of as opposition political parties is to what extent they have exhausted what they had asked for in terms of debt contraction. At this stage, debt could still be appropriate but it needs careful analysis. Things are being done out of expediency and this is worrisome,” Dr Musumali said.
“We are heading towards 2016 so despite the opinion that was floated by the President that the government would be more cautious, we know that at the end of the day, sticking on to power is more urgent on the agenda than macroeconomic stability of this country and that’s why you see these contradictions between what they say and what they do.”
He said the PF must learn to consult widely before commiting the country to huge loans.
“When you find yourself in a crisis like this one, major decisions have to be made with a lot of caution and before giving a go-ahead to huge loans, you need to do a lot of consultation to ensure that public confidence is secured and that is done by bringing it out, creating more transparency in the way business is being done. It is important in a crisis,” said Dr Musumali.
“Lastly, the debt levels of this country are not being rightly managed. As citizens, we need to know our debt levels and repayment schedules because we are all stakeholders and we are mortgaging the future of this country in a big way and we would very much like to see how that future is going to look like. We need to know how deep we are in debt, so our appeal to government is don’t contract debt without a good plan for paying back. We don’t want to jeopardize the future of this country. The recklessness that we are seeing today cannot be justified in securing that future.”
The Post
Posted by Editor
on December 4, 2015. Filed under LATEST NEWS.
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Shaka Zulu
December 4, 2015 at 7:41 pm
Believe it or not, part of this money will be used for PF campaigns next year.That’s why Africa can’t develop.
New Educated Zambia©❤√
December 4, 2015 at 8:10 pm
Ok so the other week lungu made the so called long awaited conference where he spoke to zambians and said that government would cease all road contractions due to hard economic times. I was the first to point out that it was just hot air from the president. Now here we have the government doing the exact opposite of what lungu said. Surely this government is disorganised or do not communicate among themselves. When HH points out at world forums that the pf government is impotent in economic management, would you call him a liar? Bane time has come to vote upnd
KC
December 5, 2015 at 6:53 am
Kanshi tamumfwa.The president said all projects at contract stage must be finalised and works commenced and then thereafter no new contracts should be intitiated…..
New Educated Zambia©❤√
December 5, 2015 at 10:03 am
You dull pf chap. It says pf government had just approved the loan from China. What contract was already binding? They have borrowed with the intention to contract for road works. Please read and do away with blind loyalty
Judge Joe Bidden
December 5, 2015 at 2:11 pm
Thick head that money is to fund new projects
ponyax
December 4, 2015 at 9:35 pm
nonsense project, y copperbelt only out of all
observer
December 4, 2015 at 10:29 pm
Where do you want the government to taget after L 400 obviously its C 400 that’s copala mwana not S tonga bull 400.
Lyepa Luneta
December 4, 2015 at 11:03 pm
Without controversy, these people who are borrowing without Zambians’s consent, while at the same time know that it is the same Zambians who will pay back these huge debts at high cost (taxes) must one day be held accountable and be brought to book.
They should not lie to us: these debts are not fully for infrastracture development, but also for consumption. Who does not know that government is struggling to pay civil servants?
Incognito
December 4, 2015 at 11:09 pm
PF are more interested in power than anything else, the poor Zambians are being fooled by the new roads.
Like “The horable monster of finance Alekanda Chikanda”has aluded to before, the harp hazard construction projects are just a way to siphon money from government
springer
December 5, 2015 at 10:20 am
Mwala twipaya ne nkogole imwe.The funding is from china and the road contracts are given to chinese.The money goes back to china and we remain with a huge debt.what are you doing imwe!!!!!!!
New Educated Zambia©❤√
December 5, 2015 at 10:24 am
Vote upnd. Chapwa
springer
December 5, 2015 at 1:28 pm
We have decided already its HH this time,just waiting for election day chapwa.
New Educated Zambia©❤√
December 5, 2015 at 2:41 pm
we thank you
Ndanje kakhs
December 5, 2015 at 1:37 pm
Food subsidies and potholes that’s what you want? No sacrifice no success. You think the Americans got what they have on silver platter?
Judge Joe Bidden
December 5, 2015 at 2:17 pm
Iwe that we are not disputing the problem is the timing in the middle of an economic catastrophe when copper is on its lowest pricing then you go and borrow billions to go and fix potholes in Copperbelt? It makes sense? This is just a campaign to CB ati we repaired your roads. But why walk on a good road when you are starving at home? Also why Copperbelt this and that? Is this not also a form of segregation?
Ndanje kakhs
December 5, 2015 at 5:31 pm
There will never be a time in life. We say uwakwenshya ubushiku
Fantasy
December 5, 2015 at 5:40 pm
Why borrow year of jubilee is meant to be free from such, the propersity to borrow is as high as any gang cud be knowing they wil not be ther tomorrow to handle the hustle of lookn for money to pay back
Kings s sakayi
December 6, 2015 at 6:50 am
Where is my comment?
Kings s sakayi
December 6, 2015 at 8:52 am
At least even Obi Okonko in things no longer at ease proved to be the best economist ever. Why doesnt EL seek wisdom of running a home in difficult times like this from several Obi’s of today or less go to the grave of this character if any for some help. I hear that he is a lawyer and one of the qualification for law study is history. It seems like he is poor at the mentioned subject.
hamakala
December 6, 2015 at 1:24 pm
lusaka is not zambia
BYUBilo
December 6, 2015 at 5:40 pm
POOR thinking