MP Mutati says it’s illogical for Zambia to acquire loans on behalf of Zimbabwe

MP Felix Mutati says he is shocked at chief government spokesperson Chishimba Kambwili’s announcement that the Zambian government had contracted a US$114 million loan to repair the jointly owned Kariba Dam on behalf of Zimbabwe because that country has no capacity to repay debt.

Commenting on Kambwili’s remarks, Mutati said no country could take up the challenge of borrowing a debt on behalf of another.

At a press briefing in Lusaka on Tuesday, Kambwili said the PF government was borrowing responsibly, adding that the financial lenders were approving the loans because they were satisfied with the country’s capacity to repay.

“The World Bank and the Africa Development Bank are well experienced institutions in the field of finance and there is no way they can give money to a country that has no capacity to pay back,” said Kambwili.

“For example, the Kariba Dam is jointly owned by Zambia and Zimbabwe, but when we did an application for a joint loan, the World Bank refused because Zimbabwe has no capacity to repay; so the Zambian government has taken up the responsibility to get the whole loan on behalf of Zimbabwe and we will lend it to the Zambezi River Authority and they have the capacity to pay.”

But Mutati, the acting chairperson for the Parliamentary Select Committee on Economic Affairs, Energy and Labour, described the government’s move as illogical.

“No country borrows on behalf of another, it’s not logical. Each country must be able to stand on its own. It is that simple, because no person can borrow money on behalf of another,” he said.

Mutati wondered why the government would decide and rush into borrowing funds on behalf of Zimbabwe when Zambia was struggling to settle its own outstanding debts.

We have monies that have remained unpaid as a result of the distribution of capital assets and obviously if those monies remain outstanding, it will not be a wise thing to continue accumulating debts,” he added.

And Mutati, who laughed upon hearing that Zimbabwe was making preparations to host a US$1 million birthday celebration for President Robert Mugabe, challenged the Zimbabwean government to do its part in renovating the Kariba Dam which it also benefited from

– See more at: http://postzambia.com/news.php?id=6022#sthash.IGTFusz4.dpuf

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