Deal decisively with Zesco financial situation, cooperating partners urge govt

GERMAN Ambassador to Zambia Achim Burkart says the current exchange rate between the US dollar and the Zambian kwacha puts even more stress on the less than 10 per cent in the 2020 national budget available for socio-economic development.

He was speaking in his capacity as Zambia’s Cooperating Partners Group chairman during the second high-level policy dialogue with cooperating partners at Mulungushi International Conference Centre in Lusaka yesterday.

National development planning minister Alexander Chiteme is the co-chairman.

The last high-level policy dialogue with cooperating partners in June this year dealt with the macro-economic situation and food security.

Yesterday’s meeting was discussing follow-up topics bordering on an overview of the economy during the year, energy reforms, and agriculture and food security.  

The purpose of yesterday’s gathering, according to Chiteme, was to discuss and exchange views between the government and the cooperating partners, with the aim of finding solutions to some of the national challenges affecting Zambia.

“This meeting is also an important opportunity for the government to share progress on some of the key programmes being implemented to address some of the issues to be raised by our cooperating partners,” he said.

The minister thanked cooperating partners for their continued support to Zambia’s developmental agenda by contributing to the financing of the 7th National Development Plan. 

“As the government, we strive to improve the public service delivery, improve the standards of living of our people,” said Chiteme.

On his part, Ambassador Burkart said it was essential to have in place strong mechanisms for dialogue and that it was even more important: “that we have a place for mutual agreement on how to step-up implementation of the 7th National Development Plan and the SDGs (Sustainable Development Goals).”

He hoped the meeting marked a step in that direction.

The Ambassador also highlighted some key points as an introduction to the day’s earmarked discussions.

Ambassador Burkart recalled that President Edgar Lungu in his last parliamentary address highlighted that over 90 per cent of Zambia’s annual budget was taken up by debt payments and personnel costs, leaving less than 10 per cent to invest in programme implementation. 

“The current exchange rate between US dollar and the Zambian kwacha even puts more stress on that particular part of the budget. So we do very much see that situation and we are engaging into discussions with the government on that,” Ambassador Burkart said.

“This number (less than 10 per cent) makes it very clear why regaining fiscal space and … the debt situation is… as the cost of debt service is crowding resources for other priorities. That’s why it is our first topic today.”

He further spoke about Zambia’s high risk of debt distress and the absence of an International Monetary Fund programme.

“We would like to encourage you to work forcefully to towards an IMF programme and I think that the recent visit of an IMF team, which just left yesterday (Tuesday), is a sign that the government of Zambia is indeed determined to engage further with the IMF. I can assure you that cooperating partners are ready to support you in this endeavour,” he said.

“In the spirit of Sustainable Development Goals, we all strive to realise, protecting the most vulnerable of Zambians. In times of limited fiscal space, it requires prioritisation.” 

He also spoke about the importance of fighting corruption.

Ambassador Burkart indicated that Zambia had numerous institutions and regulations in place to fight corruption.

He added that Zambians should be proud to have institutions like the Financial Intelligence Centre (FIC). 

On energy, the diplomat said the topic could hardly be more newsworthy than now.

“Despite all the efforts to mitigate the energy crisis, load-shedding has increased to more than 15 hours, affecting households and small businesses, especially small businesses who can’t afford expensive alternatives,” Ambassador Burkart explained. 

“At the same time, Zesco’s operations are loss-making, adding to the power’s utility level of duty. That is why cooperating partners are calling on the government to deal decisively with Zesco financial situation. I’m very confident that will be done in time [and] the recent announcement that Cabinet has approved the energy policy will have, among other issues, the focus on cost-reflective tariffs….”

On the drought and the consequences of climate change, the cooperating partners indicated that they were “here to support Zambia in this difficult situation.”

He noted according to the government of Zambia, that more than 2.3 million people urgently required life-saving necessities. 

“We call on the government of Zambia to continue to mobilise resources at all levels of government. Budget release is not the only thing…” said Ambassador Burkart.

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