MERCHANTS OF DOOM SLAMMED
…sick minds spreading false and alarming statements about country’s debt
THERE is no single crisis in Zambia at present and it is only nefarious, sick and perverted individuals who are bent on harming the country's fiscal image for purposes of regime change by deliberately spreading alarmist statements, former UPND vice president for politics Canisius Banda has charged.
Dr Banda reiterated in an interview with the Daily Nation that Zambia’s fiscal status was sound and that the country was not in a debt crisis. “It is a fact that the economic growth potential of Zambia is far greater than that of many Western countries. Greece, for example, has been a basket case since 2010. And yet the Greeks are still alive and well, “Greece’s debt reached 180 per cent of its Gross Domestic Product (GDP). Zambia's has not,” he said. Dr Banda pointed out that Zambia’s debt was only at 53 per cent of the country’s GDP and that the debt to GDP threshold of 56 per cent had not been breached. He observed that it was the ‘sick and perverted merchants of doom’ that thought that Zambia was poor and wanted it to fail. Dr Banda said that the move suited their nefarious agenda for regime change and profit-making from such negative speculation. He urged President Edgar Lungu to keep his eyes on the ball, saying that his economic recovery plan was on course. “When all figures are adjusted for economic growth over time, the outlook of Zambia’s debt sustainability is even better. Far better than that of Puerto Rico which owes over 70 billion USD. Greece required over 270 billion euros [315 billion USD] to be bailed out. Zambia, in ratio terms, requires far less,” he said. Dr Banda advised the President to focus on investing the little the country had so that debt repayments came from the dividends that would accrue from such investments. He warned that merely saving and focusing on servicing the debt could lead to economic contraction and more poverty. And Dr Banda also advised that for the country to attain the required economic buoyancy, there was need to cut overall government spending and limit this to high yield projects only. He said that the country should sale existing debt to friendly nations such Brazil, Russia, India and China on negotiated less expensive terms and avoid costly money from the open market. “Zambia must carefully read local, regional and global commodity deficits or demand patterns. Zambia must produce, produce, and produce more. We must export more, import less and encourage citizens, over time,
When all figures are adjusted for economic growth over time, the outlook of Zambia’s debt sustainability is even better. Far better than that of Puerto Rico which owes over 70 billion USD. Greece required over 270 billion euros [315 billion USD] to be bailed out. Zambia, in ratio terms, requires far less,” he said. — Dr Canisius Banda.
to rely on locally produced goods and services,” he advised. Dr Banda said that the country should also register all vendors, street or otherwise, to widen the tax base but that should keep taxes low and few to encourage compliance. He also stressed the need to curb tax avoidance and evasion by corporate entities, cut government wastage and discourage banking of ‘the looted’ resources abroad among other. Meanwhile, Dr Banda reiterated that instead of avoiding debt, Zambia should actually borrow more from inexpensive lenders for investment as the required stimulus for economic growth. The following is Dr Banda’s thoughts in his own words: Zambia is NOT in a debt crisis. As a matter of fact, there is no single crisis in Zambia at present. Zambia is just under-developed, that is why that it currently has its seventh National Development Plan is a laudable situation indeed. It is such plans that will get Zambia to develop, and we are on course. It is a fact that the economic growth potential of Zambia is far greater than that of many Western countries. Greece, for example, has been a basket case since 2010. And yet the Greeks are still alive and well.
Greece’s debt reached 180 per cent of its GDP. Zambia’s has NOT. Zambia's debt is only at 53 per cent of our GDP. And our debt to GDP threshold of 56 per cent has NOT been breached.
And further, when all figures are adjusted for economic growth over time, the outlook of Zambia's debt sustainability is even better. Far better than that of Puerto Rico which owes over 70 billion USD. Greece required over 270 billion euros [315 billion USD] to be bailed out. Zambia, in ratio terms, requires far less. And in potential terms, Zambia is far richer than Greece. The trouble that Zambia faces today is that individuals working singly and in concert with nefarious forces, all bent on harming Zambia’s fiscal image, for purposes of regime change and profit-making off Zambia's very debt, are deliberately spreading alarmist statements. These are detractors that President LUNGU and his government must be wary of, and should NOT allow to derail Zambia's development agenda. Instead of merely saving and focusing on servicing our debt, which behaviour could lead to economic contraction and more poverty, President Lungu must focus on investing the little we have so that debt repayments come from the dividends that will accrue from such investments. Further, the following prescription must be followed for us to attain the required economic bouyancy:
1. Zambia must carefully read local, regional and global commodity [goods and services] deficits/demand patterns. In the long run, regional and intra-Africa trade is the solution.
2. In response, and as a mirror of these commodity deficit/demand patterns, Zambia must produce, produce, and produce more
3. We must export more
4. We must import less
5. We must encourage citizens, over time, to rely on locally produced goods and services
6. We should register all vendors, street or otherwise, to widen tax base
7. We must keep taxes low and few to encourage compliance 8. We must cut government wastage [eliminate over-pricing of goods and services]
9. We must curb tax avoidance and evasion by corporate entities like KCM and FQM
10. We must increase spending by Government Spending Agencies [GSAs] on local companies
11. We must reduce capital flight
12. We should encourage local spending by 'thieves'. And discourage banking of 'the looted' resources abroad
13. We should limit borrowing to bilateral confessional loans and invest loans only on projects with repayment capacity
14. We must cut overall government spending and limit this to high yield projects only
15. We should sale existing debt to friendly nations such Brazil, Russia, India and China on negotiated less expensive terms. Avoid costly money from the open market.
Instead of avoiding debt, Zambia should actually borrow more. Yes, borrow more. Borrow especially from inexpensive lenders for investment as the required stimulus for economic growth. It is those that think that Zambia is poor and want it to fail, sick and perverted merchants of doom, that are saying that Zambia is in a debt crisis. This suits their nefarious agenda for regime change and profit-making from such negative speculation. President Lungu must therefore keep his eyes on the ball. His economic recovery plan is on course.
Dr Canisius BANDA Development Activist Former UPND Vice President for Politics