Debt trap for Lusaka real-Muhabi

The rate at which the PF government is contracting foreign debt will put Zambia into serious problems, says MMD’s national secretary Muhabi Lungu.

Mr Lungu said it was unbelievable that within a period of two years, the PF has contracted $4.5billion debt when it took 36 years for Zambia to contract $7.2billion.

The PF government should seriously consider the rate at which it is contracting foreign debt because the country will be in serious problems soon or later.

Mr Lungu said it was unfortunate that secretary to treasury Fredson Yamba was not being sincere with the people of Zambia when he said that Zambia was not headed for the debt trap.

He said the rate at which the debts were being procured and how they would be injected because the PF did not care as they would not return power in 2016.

“The $7.2billion we are talking about was both by the UNIP and MMD governments but just for three year that the PF have been in power we have borrowed a lot of money and we are talking about commercial debt which is at eight per cent.

“They are doing this too fast and we are reaching the levels of unsustainability. They should not take advantage of the debt to GDP ratio of 60 per cent and think they will sustain it because the debt which has been accrued so far exceeds 40 percent and we should not pretend that we are ok,” Mr Lungu said.

Mr Lungu said that Zambia was a mono economy and that it was dangerous to use international standards to contract a debt at that GDP ratio.

He said it was not convincing that the PF government would pay back the debt going by how they had been introducing and revoking the Statutory Instruments.

He said these policies did not give the investment decisions that would pay the returns and that Zambia would be debt free in 10 years time.