GOVERNMENT says the debt swap is actually a way of payment of arrears owed to public workers in form of leave travel benefits, salary arrears and other fringe benefits which are part of civil servant conditions of service that have not been settled by government despite being earned, resulting into arrears owed to them.
This is according to Secretary to the Treasury Fredson Yamba.
According to his talking noted, the exercise was “just one way of liquidating what is owed to employees of the government”.
“This exercise is cost neutral to government. It is a debt swap where government pays what the civil servants owe to the banks only to the extent that the civil servants are owing government,” he said.
“The exercise of debt swap is actually a way of payment of arrears owed to public workers in form of leave travel benefits, salary arrears and other fringe benefits which are part of civil servant conditions of service that have not been settled by Government despite being earned, resulting into arrears owed to them.”
Yamba says the reconciliation would take three months, after which the actual amounts involved would be ascertained.
“Nonetheless, the exercise will be cost neutral to government as the amounts will be offset against what the government is owing civil servants,” he said.
Yamba said the exercise was not an entirely new concept to government as it had undertaken such transactions with utility companies and the Zambia Revenue Authority (ZRA).
“The only difference now is that rather than swapping with companies, this exercise is focused on individuals but still remains in line with the debt dismantling strategy,” said Yamba. “The amounts for payment of arrears are already budgeted for and it has been the advice of multilateral institutions that government should reduce on accruing arrears.”
During a visit to PMEC, Yamba; who was accompanied by Accountant General Kennedy Musonda Musonda, permanent secretary Ministry of Information and Broadcasting Services Amos Malupenga and permanent secretary Public Service Management Division Boniface Chimbwali, confirmed that the debt-swap initiative had been implemented for the July 2021 salaries to be paid next week.
Yamba took the opportunity to demonstrate how the debt-swap initiative had been effected and to illustrate resultant increase in take-home salaries, in many cases.