Magande rubbishes PF’s debt swap

Magande rubbishes PF’s debt swap

MAGANDE QUESTIONS RATIONALE BEHIND DEBT SWAP…when more civil servants are not even on payroll

By Patson Chilemba

Former finance minister Ng’andu Magande has questioned the rational behind the debt swap, when most civil servants that have been employed are not even on the payroll.

Speaking with Daily Revelation over the Debt Swap introduced by the government where they will not deduct money from civil servants salaries for the loans acquired for the months of July, August and September, 2021, with a guarantee that the government would do so, Magande wondered where the government would source the money from to guarantee the said payments to lenders owed by civil servants.

“That’s what puzzles me because I don’t know where the money will come from. Maybe they will borrow money from ZANACO (where government has some shares)…’because you are our parastatal, we shall pay you in five years’. And then it adds to the current local debt which is about US$ 7 billion,” Magande said. “What the government is saying is they will take over the debt of the civil servants and at the end of it those civil servants will exchange that with leave days and terminal benefits. However, we don’t know when the officer is resigning, if it’s in 10 years that’s when they will recover the debt…I don’t know how interest will even be calculated on those debts.”

Magande wondered why the government was getting involved into the personal issues of civil servants, when they could not even measure the sustainability of the things the workers spent their monies on, as some could have even used the money just to buy furniture in their living rooms.

He said during his time as finance minister when the economy was booming, government deliberately set a limit that civil servants could not borrow amounts beyond 70 percent of their take-home pay, so that they could remain with something to take to their families at the end of the month once debt deductions were made.

Magande said now there was no limit to how much one could borrow, further questioning the rush to take over civil servants repayments when a lot more civil servants that were hired were not even on the payroll, while others remained unemployed.

“Here is a poor teacher who is supposed to join the system, put on the register but not on the payroll. You can’t pay K3000, but you are taking on the loan of somebody who has been in the service for 18 years and they are going to be getting K200,000, K400,000 at the end,” Magande said. “How do you take over a loan of a senior secretary who is getting K15,000 per month?”

Magande said the debt swap should not be seen as debt relief on the civil servants, but a postponement on the payments towards loans, which they will still have to account for at some point in the future.

“I don’t know when civil servants are paid, but when I was in government they used to be paid around the 23rd, 24. Now will they be able to work out these calculations in three days? It will just cause confusion to the whole payroll,” said Magande, adding that he would not be surprised to hear arguments that because of system failure the moratorium will only commence in August. “So we are already calculating come two days from now.”

Last Friday, government announced commencement of debt swap for all civil servants, with no deductions to be made on their loans in the next three months.

Information and Broadcasting Services permanent secretary, Amos Malupenga said no deductions will be made from salaries of all civil servants for the months of July, August and September.

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