Zambia’s economy gloomy-Magande

Unless stringent corrective measures are taken Zambia is headed for economic instability in which the international community and prospective investors will think twice in dealing with the country, National Movement for Progress (NMP) president Ng’andu Magande has warned.

Following the Standard & Poor’s down-rating of the country to negative from stable, Magande said the downgrading was an indication that Zambia’s economic performance was not inspiring to the international community.

Magande said the rating meant that Zambia had developed a bad debt habit and that it would be difficult for the PF government to borrow from the international community.

He said minister of Finance Alexander Chikwanda has publicly confessed that he has had challenges raising revenue because of the pressure he had in financing projects that were not budgeted for.

Magande said the international community was interested to know which economic path Zambia was taking and that the latest downgrading of the country was going to scare away prospective investors while those who were already in the country would be tempted to start externalizing their profits to avoid getting trapped into the country’s bad debt.

He said the negative rating would also affect the servicing of the $750 million euro pound debt and that the owners of the debt would easily be forced to find alternative market and resale the debt.

The NMP leader explained that there was a danger that the negative perception the country has been given in its economic performance would adversely affect the country’s production sector.

He said there was a possibility that Zambia’s $750 million euro bond could become bad debt and that scrupulous countries would jump on the idea of buying the country’s debt at an exorbitant and inflated rate that would make it difficult to service.

Magande observed any country in the world that was ready to buy off a bad debt was shred and advised that the PF government should tread carefully on the way it was going to handle foreign debt without attracting the infamous voucher fund.

“It is unfortunate that Zambia has been downgraded to negative from stable and this means that the country will find it difficult to borrow money for its economic capital projects.” He said.

He added that the PF government was developing a bad habit in managing the economic affairs of the country adding that the Finance Minister has confessed that he had a challenge in dealing with the 8.5 percent budget deficit.