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We need to rejuvenate trust between bondholders and govt – Mutati

FELIX Mutati says Zambia should not pay its bondholders and other creditors because of being “boxed in”.

“We must pay because it’s part of the strategy to deal with issues around debt sustainability,” Mutati said, shortly after attending a Church service at Blessed Christ Ministries in Mtendere, Lusaka on Sunday.

“[But] if you do it because you are boxed in, you lose confidence and the holders will even check more.”

Zambia has, in real sense, defaulted on its Eurobonds but government officials remain cagey on the matter.

On Friday, creditors refused to accept the Zambian government’s proposal for a possible six-month suspension of interest payments on all debt.

Mutati, a former finance minister, said the outcome of the meeting with bondholders was a sad development.

“We need to rejuvenate trust between the bondholders and government. We also need to minimise as much as it’s practically possible the damage to the reputation of the country, Zambia,” Mutati, the Movement for Democratic Change (MDC) president, said. “We need to ensure that the bondholders and other creditors do not walk away from the table of engagement. We have to keep the engagement going.”

He added that whatever the scenario, Zambia shall have to pay what it owes.

“What is important is that when we do pay, we must not do so because we are boxed in. The last thing that we should minimise as a country is that we are making too much noises and those noises are eroding the confidence,” Mutati explained.

“What we need to do is purely the issue around confidence. Without confidence in the economy, potential investors, especially foreign ones, would hold back. So, for me the immediate answer [even] on the tumbling of the kwacha is confidence.”

He advised that if Zambia could be seen actually meeting the terms of engagement, in particular paying the bondholders, confidence would be re-built.

“So, there is no substitute [but] pure confidence and trust that we need as a country,” stressed Mutati.

Asked to speak to the wounding of UPND official, Charmaine Musonda, on Sunday, by suspected PF cadres, Mutati responded that: “it is unfortunate that Zambia is on a path where we are harvesting that in order to lead, you have got to beat.”

“In order to be ahead, you have got to maim. You can never be ahead of the queue through violence. Violence must be condemned in the strongest possible terms. Let’s encourage differences in ideas because that’s what builds society,” he said.

“You can never have a single opinion – not even at a household level. So, if you can’t have a single opinion at household level, how about at national level?”

Mutati advised law enforcement agencies not to look at who had been beaten but instead at look at who has beaten.

He noted that those who maim others should not be camouflaged into any political colours but be called as criminals.

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