PF Committing Economic Sabotage Warns Bwalya

UPND Presidential Spokesperson Anthony Bwalya has accused the PF Government of committing economic sabotage.

Bwalya has pointed to its “insatiable appetite for debt”, expressing concern regarding the impact this stands to have on the economy and public finances in years to come.

Among the problem areas identified by Bwalya are the "illegal" raising of the debt ceiling, which was increased in April 2020 during a parliamentary recess. The move meant that the amount of debt government can contract without parliamentary oversight was more than doubled.

“The aggregate debt ceiling was increased from the parliamentary approved limit K310bn to K760bn. This is the equivalent of $35bn or 175% of GDP. All this without parliamentary oversight and without the public knowing. This is dangerous and shows the extent to which the PF Government is willing to sink the people of Zambia into debt,” Bwalya writes.

He points to Bank of Zambia figures that show a spike in local debt in the last six months. At the end of 2020 bonds worth K87.5bn had been issued. This rose to K135.2bn as of July 2021. According to Bwalya the increase of almost K50bn represents almost half of the 2021 National Budget.

Bwalya calculates that local debt alone has become unsustainable, with an effective cost of K48bn a year. Given that Government revenue in 2020 was just K65.7bn he says the debt will “constrain public finances immeasurably” and warns that if the PF remains in power “this will end up becoming a Ponzi scheme, where you keep borrowing to pay back debt.”

“The UPND is cognizant of the fact that there will be no quick fix to this mess created by the PF. However, key to fixing this mess will be to grow the economy rapidly to allow debt ratios to come down to acceptable levels, and increase the ability of the Government to service its liabilities,” Bwalya writes.

“This will be achieved by ensuring a conducive business environment, with stable but attractive economic policies, combined with prudent fiscal management and zero tolerance for corruption and waste,” he concludes.