Patriotic Front (PF) Media Director Antonio Mwanza has charged that the Bankers Association of Zambia (BAZ) is in a panic mode over the Debt swap program. Reacting to statement issued by BAZ stating that all existing terms and conditions on loans are still in force, Mr Mwanza charged that BAZ is in a panic mode after realizing that they will be running out of their business of exploiting Zambian workers as no one will be getting loans from them at 21 percent interest rate when government is giving at 5 percent.
He has since urged civil servants to ignore the statement from BAZ as their only interest is to make money. “First of all people must understand that BAZ are in business and these are the same people who have been giving loans to civil servants at very high interest rates of up to 21 percent,” Mr. Mwanza said.
Mr. Mwanza stressed in the final analysis of the debt swap program, the PF government wants to force private lending institutions to stop exploiting public service workers and starting giving loans at lower rates. And the PF Media Director has further clarified that the debt swap program is not a political gimmick but a program meant to lessen the debt burden on civil servants whose negotiations started in 2018.Speaking when he featured on DC talk Radio in Lusaka today, Mr. Mwanza explained that government decided to come up with the debt swap program to give relief to civil servants after realizing that most of them were highly Indebted.
He explained that debt swap is just one of the three components of the government program and does not in any way mean that the government will not pay the private lenders nor does it mean that civil servants will not pay their loans but will do so at different conditions. “Instead of them paying those loans at 21 percent, government will buy off the loans and pay directly to the private lenders,” he explained.
The PF Media Director disclosed that government has since released K255 million cash to pay private lending institutions as well as banks. Mr. Mwanza further explained that under the debt dismantling program, government has released K200 million to start paying those who are owed by government but do not owe government anything and not even third parties.
He added that this program will run simultaneously with the debt swap, meaning that retirees will also be cleared at the same time government will be clearing the debt for those in service.And Mr. Mwanza explained the debt restructuring plan applies to those who owe third parties and has two scenarios.”(i) Government owes you and you owe third parties: what government will do is to clear, say government owes you K10,000 and you owe third parties K50,000, it will pay the K10,000 to the third party and then shift your K40,000 balance to PSMFC and restructure it to a more convenient rate to ease the burden.
It doesnt mean you will not pay back but you will start paying back at a lower rate. If you were paying K2000, you will the start paying say K500 or even less,” Mr. Mwanza explained. “(ii) You dont owe government and government doesnt owe you but you owe third parties: government will simply pay off that debt of yours and shift that debt to PSMFC and restructure it so that you can have a relief in paying,” he added.