WE should not be limited to borrow only 40 per cent of our gross domestic product, says infrastructure minister Ronald Chitotela.
During a press briefing today to justify the US$1.2 billion that government will spend on building the Lusaka-Ndola dual carriageway, Chitotela said Zambia should not be inhibited to borrow.
He said President Edgar Lungu had been “bold enough” to borrow to invest in infrastructure development in the country to grow the economy. From the time President Lungu launched the dual-carriageway construction works last week, key stakeholders have questioned the inflated cost at which the road would be constructed, which would translate into around US$2 million per kilometre.
But Chitotela said the government would continue to borrow to invest in new roads.
“In Africa, because people had gone to Harvard University and learnt and said for you to grow the economy in Africa, you must not borrow beyond 40 per cent of the GDP. In Europe…Japan today, the total debt is 245 per cent of their GDP; in America, it is 178 per cent of the GDP,”
“In Zambia, we are at 32 per cent and we are told if you borrow beyond 40 per cent, you will not be able to pay back hence your economy will be classified by some international classifications who have learnt theories in Harvard University and they will classify us either us negative, junk or positive and we have agreed to live with that; us we can’t borrow beyond 40 per cent of our GDP because then we can’t [and] then we will fail to sustain the debt.”
Latest statistics by the Ministry of Finance and International Monetary Fund reveal that the government’s net debt ratio increased from 23 per cent of GDP in 2013 to an estimated 57 per cent in 2017.
he claimed the cost of cement and bitumen had aggravated the cost of road construction the country.
“Just cement alone costs five to six times higher than in South Africa,” Chitotela claimed.
He said whereas the Ndola-Lusaka dual carriageway would cover 640 kilometres, the total road network to be built in the process would be 800 kilometres when the additional roads which included bypasses were constructed.
“The question is how do grow the economy if you can’t invest in infrastructure development? How do we improve the GDP because the GDP can only improve when you grow the economy,”
“We must not be scared to invest in projects that are going to assist to grow the economy. We need to realise that we need to take bold decisions; begin to implement these theories and hence our children will be able to see the benefits of what we are doing today.”