IMF fear forces Zambia to disclose true debt: external $ 17 b, local K38 b

IMF fear forces Zambia to disclose true debt: external $ 17 b, local K38 b

The PF regime has finally been forced to disclose Zambia’s actual debt after 6 years of concealing.
Finance Minister Felix Mutati disclosed the shocking statistics in parliament Wednesday afternoon when he said that Zambia’s external debt alone is US $ 17.2 billion. The domestic debt is now 38.6 billion. Remember that Zambia’s Gross Domestic Product (GDP) is only USD 20.9 billion (2017, World Bank estimate).

“Mr Speaker, Zambia’s external debt stock as at the end of May 2017 increased to US $ 17.2 billion from US $ 6.9 billion in December 2016. The increase on stock was on account of new disbursements,’ Mutati said.

Which disbursement can amount to US$11 Billion within five months?

He said the domestic debt stock was 38.6 billion in May 2017 compared to 33 billion in December 2016,” Mutati told PF MPs who assembled and called themselves a parliament.

Is Mutati being truthful? How possible is it that the country acquired US$11 billion worth of external loans from December 2016 to May 2017, just within five months?

When Mutati presented the 2017 budget last year, he said:

‘Mr. Speaker, the stock of Government’s external debt as at end September 2016 was US$6.7 billion, representing 35 percent of GDP. The stock of domestic debt in the form of Government securities was K26.0 billion, representing 12 percent of GDP. Clearly, we are walking a tight rope. We therefore, have the responsibility to ensure debt sustainability. We must not burden the next generation with debt.’

Is it not possible that the IMF has threatened Mutati that it would not give Zambia bailout if the regime does not disclose the true debt?

How will the IMF receive this new revelation since Mutati has been telling them that Zambia’s external debt is only US $ 6.9 billion?

Remember the IMF cancelled a bailout to Mozambique after discovering that the Mozambicans have been concealing the country’s actual debt?

Why did Mutati suddenly decide to address parliament and make such a staggering announcement?

When did the Zambian minister of Finance start giving a state of the economy address?

SOMETHING IS NOT RIGHT SOMEWHERE?

The Watchdog has always been telling you that the PF is lying, Zambia’s debt is close to $20 billion. Do you still want to argue?

And for the first time, the regime through Mutati gave the true poor performance of the economy under Lungu.

The minister said the fiscal performance in the first five months of 2017 was challenging.
“Revenue underperformed by 10 per cent compared to budget. This underperformance on revenue has been on account of lower tax compliance by tax payers and delayed implementation of budget measures such as land titling, installation of fiscal devices to improve VAT collection, implementation of electronic equipment in the communication sector to improve the performance of excise duty and the introduction of a single window at entry points to reduce the turnaround times at borders and boost revenues,” said Mutati.

“Revenue underperformed by 10 per cent compared to budget. This underperformance on revenue has been on account of lower tax compliance by tax payers and delayed implementation of budget measures such as land titling, installation of fiscal devices to improve VAT collection, implementation of electronic equipment in the communication sector to improve the performance of excise duty and the introduction of a single window at entry points to reduce the turnaround times at borders and boost revenues,” said Mutati.

He said although the country had made tremendous social and economic progress, risks remained high on the external side.
“Based on the need to support the external side, increase market confidence, enhance investment flows and to leverage more resources of cooperating partners, government has engaged the IMF on a possible programme. In this regard, Mr Speaker, we hosted the IMF in discussion from the 29th of May to the 10th of June. Mr Speaker, during these meetings, the government and the Fund agreed on the remaining actions needed to reach a staff level agreement on a programme that could be supported under the IMF’s Extended Credit Facility. With the required actions agreed to have the programme presented to the board in August 2017,” said Mutati.
“Mr Speaker, let me take this opportunity to emphasise that the position with regards to where we’re in our discussion, the major issues required to be addressed for us to proceed to the conclusion, mainly relate to higher than projected budget deficits, accumulation of arrears and increased debt levels.”
The minister said key policy structural measures aimed at mitigating the above challenges include reforms in the energy and agricultural sectors.
“Further, recognising the reforms may have adverse effect on vulnerable members of our society. I did state Mr Speaker, that government will scale-up the social protection programmes, in additional to increased resources that government has committed to the programme. Our cooperating partners have also augmented these resources for social protection,” he said.
On the state of the economy, Mutati said “the economic performance has rebound with inflation down to single digit, the exchange rate remaining largely stable and the GDP starting to recover”.

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