Magande attacks ‘empty’ US$750m Eurobond

Wed, 19 Sep 2012 07:41:57 +0000

The government’s decision to borrow $750 million from unknown person without supportive projects by government is wrong says former Finance Minister Ngandu Magande.

And Mr Magande observed that the decision by government to pump $120 million into the Zambia Railways is an indication that the current government did not have a plan for the money the borrowed.

He said it was surprising that government announced two days after repossessing the former Railway Systems of Zambia that it would pump in $120 million to help revamp the railway system.

The former finance minister noted that government should have indicated to Zambians why it decided to acquire such monies without specific projects where the monies would be channelled.

He wondered why government did not want to release a full statement to indicate why it was borrowing so much money without saying the intended purposes for the money.

“We want to know why government has borrowed and out of the borrowing they decide to give part of the money to the repossessed railway systems.

Can they explain what was involved and who they borrowed the $750 million from? It is a clear indication that they just got excited and borrowed more than what they wanted but the question is where will they get the money to pay back?

This money was given to Zambia by private investors and Zambians don’t know who they will repay the money to in tens years time.

This decision was made haphazardly because no Zambian was availed with the information. We don’t know what the issues of repayment are.

The government was supposed to let us know abouit the projects they intended to spend the money on unlike what has happened,” Magande said.

The former minister said government needed to do a feasibility study on what projects needed the money that was borrowed.

Mr Magande has also challenged government to explain what percentage the consultants they involved would be given out of the amount.

He said the decision by government to involve Barclays Bank and Deutsche Bank was questionable as the country had financial analyst that could have done the same job.

“This government has done us a pure “don’t kubeba” because they have not told us anything in as far as the euro bond was concerned.

How can they say the railway project was an urgent matter and immediately allocated some funds to it?

When did they know about that because the repossessed company has not yet done its feasibility study on the remaining assets.

We are wondering how they arrived at this amount because we are yet to get a report from the management of the company,” he said.

Mr Magande however, advised government to use the money with caution because he said it was extremely painful for other people to payoff the debt they was not properly utilised.

He said the advisors to President Sata should advise him properly by putting the interest of Zambians first.