The decision by Government to increase the debt threshold from K20 to K35 billion yesterday divided Parliament resulting in a division in which Government won by a 74 to 50 votes.
Opposition members protested that the increase in debt would burden the country with unsustainable borrowing for which future generations would be held accountable. They complained that the lack of transparency in which projects were being implemented created room and avenues for corruption.
Former Minister of Finance Dr. Musokotwane complained that while it took the UNIP Government 27 years to build a debt of US$7billion it had taken the PF Government less than two years to owe more than US$3.4 billion, “ And this is before contingent liabilities are taken into account. There is the Zamtel liability of about US$400million and another amount from the Railway system- all of which must be factored into debt.” He said.
He said the debt was climbing “too fast.”
Solwezi Central Member of Parliament Luck Mulusa also observed that investment in “social road networks” would not yield the requisite returns that would generate enough money to pay back the loans that were being borrowed at very high cost from the international community.
Social roads, he said, were politically rather than economically motivated. Instead of developing the Chingola- Solwezi Road on which copper was transported, he said, obscure roads were being built for political purposes.
Responding to the concerns the Minister of Finance Mr. Alexander Chikwanda acknowledged the concerns about the rising budget but assured Parliament that Government would be open and transparent in the disbursement of funds from the increased loans.
He explained that the budget presented to Parliament had a gap which could only be met from external borrowing and dismissed assertions that the gap could be recouped from the copper industry from windfall taxes and other taxation.
“The Mines, he said, provided less than 5 percent of the Government revenue with the bulk originating from non mineral resources and nontraditional exports.
It was totally unrealistic, he said, for the Government to abandon the deficit budget as proposed by the opposition in order to present a balanced budget.