THE Ministry of Finance says Felix Mutati made a mistake when he read that Zambia’s external debt stands at $17.2 billion instead of $7.2 billion.
But trade analyst Trevor Simumba has challenged the Ministry of Finance to explain where the Chinese debt recently contracted falls as it was not part of the $7.2 billion debt being claimed.
In a state of the economy speech to parliament on Wednesday, Mutati said the country’s external debt jumped to $17.2 billion in May from $6.9 billion in December.
“Mr Speaker, Zambia’s external debt stock as at the end of May 2017 increased to US $ 17.2 billion from US $ 6.9 billion in December 2016. The increase on stock was on account of new disbursements. The domestic debt stock was 38.6 billion in May 2017 compared to 33 billion in December 2016,” said Mutati.
After his address, online media carried stories revealing shocking details of the country’s debt as announced by Mutati.
But today, ministry spokesperson Chileshe Kandeta claimed in an interview with News Diggers! that it was not possible for Zambia to accumulate external date exceeding US$10 billion within five months.
“It was a slip [of the tongue], it’s US$7.2 billion not US$17 billion. He was looking at the statement, but you know figures… there can always be a slip,” claimed Kandeta in an interview with News Diggers!
But Simumba has stated that the $17.2 billion as announced by Mutati could be justified because Chinese debts recently contracted by the government were not part of the $7.2 billion now being claimed.
“The $7 billion being touted does not include Chinese project finance debt of approximately circa US$10 billion. As they say, the devil is in the details. We are being distracted. Parliament needs to ask the right questions. Just a snippet of announced Chinese loan funded projects:
1. KKIA new terminal: $320 million.
2. Copperbelt International Airport: $397 million.
3. L400 roads: $422 million.
4. C 400 CB roads: $493 million. Kafue Lower Gorge Hydro: $2 billion (cost increased from $800 million under MMD to $2 billion under PF after it was cancelled). Serenje to Eastern Province TAZARA rail link: $2.3 billion. Just these selected comes to US$5.932 billion. If we were to dig deeper, we would find another US$5 billion if you include the dual carriage way project, roads in Western Province that is costing billions alone due to the complexity of the road over the plains of Western Province,”
stated Simumba in a Facebook posting.
There has been serious abuse by this government when it comes to Chinese loans that are obtained without any transparency and contracted out by ministers and senior civil servants without proper due process with very little benefit to the nation but at great cost. Remember, Chinese money, though cheap, has to be PAID BACK. IT IS A LOAN NOT A GRANT OR CHARITY. One more thing: Chinese loan funds never come into the Treasury as they are project finance and the Chinese government pays contractors directly! This means there is very little link to local industry as almost everything is imported from China, including labour!”