The case for prudence

Thu, 25 Oct 2012 12:34:24 +0000

We have never questioned the case for resource mobilization.

We are appreciative and are fully cognizant of the resource dilemma that Zambia, like many other developing countries faces.

This dilemma however does not constitute licence for gratuitous borrowing which will drive the country into another debt crisis.

We have recently emerged from the Heavily Indebted Poor Country (HIPIC) programme, a not so salutary status from which we gained a moratorium of about US$7billion debt.

Most of this debt emanated from the One Party commandist, socialist economic programmes which put consumption before production.

That is why we questioned the purpose to which the US$750million Eurobond was to be put, in view of the fact that the funds were mobilized in the absence of a clearly defined appropriation programme.

The very fact that hardly three days after nationalizing the Railway Systems of Zambia the Government announced an investment of US$120million shows an element of adhoc planning.

This is dangerous, because money in hand will meet all manner of needs, many of them unplanned and therefore not able to generate the requisite resources to pay back.

We are aware that when the MMD Government initiated the Eurobond project a number of projects had been outlined. These included major road projects including the one launched by the President last thursday.

We raised concerns because the debt burden generated by the Eurobond goes beyond this immediate generation. Repayment will commence in ten years time when none or very few of the political leaders making commitments today will be in office.

The burden will fall on the people of Zambia regardless of their political affiliation.

Whether or not they benefitted will not be an issue. Those faceless people we owe will demand for their pound of flesh.

We have hind sight and the sad experience of vulture funds that have swooped on unsuspecting poor countries that have been forced to borrow more to redeem themselves from debt.

Zambia should not find itself in that position.

Every cent that is borrowed and indeed every cent that is mobilized by Government should be applied for the greater good of society, either as an investment in infrastructure or indeed profitable venture that will generate resources to pay back.

Accountability is the watchword for any democratic Government. Accountability is the ability to communicate effectively with the electorate which has expectations as enshrined in the social contract.

Gone are the days when leaders were beyond reproach and therefore insular from the critical eye of the public. With democracy nothing is sacrosanct, because freedom of information dictates that people must have full knowledge.

Therefore debt contraction is a matter of public interest, for which the Government must be fully accountable by answering the niggling and sometimes frustrating questions that may seem to emanate from “ignorant” people.

It is in fact the “ignorant voters” who are owed a duty of explanation.


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