Secretary to the Treasury Fredson Yamba has been told to stop misleading Zambians over the current debt situation because it is only the lenders of Eurobonds who benefit from the arrangement.
Prominent Lusaka lawyer Sakwiba Sikota said Mr Yamba had misled the nation when he suggested that the international community was pleased with Zambia’s issuance of the Sovereign Bond.
On his facebook posting, Mr Sikota said it was no wonder the government was failing to explain how they had utilized the first Eurobond (US $750,000) and have no details as to how the second Sovereign Bond would be used.
Mr Sikota said those who expressed satisfaction over Zambia’s debt position were actually the bond managers from Hedge Funds or Speculators who were like shylocks, ‘kaloba’ traders in the local circles.
“They don’t invest in business, factories, infrastructure or education. Their interest is to lend out money at exorbitant interest rate, they do not care how the money is used.
“Such dealers are not interested in seeing a proper business plan. Their only concern is to ensure that they are able to redeem their financial instruments even if it leads to you losing your vehicle or even the roof over your head,” he said.
Mr Sikota said high borrowing was a sign of failure and bad economic governance contrary to Mr. Yamba’s claims because ‘successful’ issuance of the Sovereign Bond was unacceptable as it only opened more government borrowing.
Mr Sikota said the ‘Yambanomics’ was unacceptable by suggesting that the economy was headed out of turbulence based on the supposed positive response from the money lenders.
He said that was not an indicator of an improving economy but instead only confirms that there were a lot of “shylocks” in Europe willing to lend out money.
“The Greek debt crisis should serve as a warning light to us. The Trioka who kept on lending money to Greece were selling this as a sign that the Greek economy was headed out of turbulence.
The truth is that Greece is now in a trap where they keep on getting more debts “to get out of economic turbulence”
“Each time the Greek government borrows a little more of the “stabilization” funds than they did on the previous occasion. It seems we are following a similar timeline; at first it was US$750 million and now it is US$1 billion.
The debt which was at 3.6 billion dollars has now risen to 4.6 billion dollar within a year since the first bond issuance. This is a rise of 28% in a single year. Our GDP growth cannot keep up with this yearly increase of debt,” he explained.
‘Kaloba’ dealers are not interested in seeing a proper business plan,” he said.