Mutati says PF could not raise $2 billion because it has reached ceiling

Mutati says PF could not raise $2 billion because it has reached ceiling

Lunte Member of Parliament Felix Mutati making a comment during the UN Economic Social and Council (ECOSOC) High-Level Session discussion at UN headquarters in New York on 6 July, 2012. Others are his fellow MPs belonging to the Inter-Parliamentary Union. PHOTO | CHIBAULA D. SILWAMBA | GRZ

Lunte Member of Parliament Felix Mutati 

Former Commerce, Trade and Industry Minister Felix Mutati, says the issuance of the US$1.25 Billion Eurobond has shifted Zambia’s economic fundamentals to the extent of raising its risk factor.

Mr. Mutati has observed that the country’s risk factor is growing high as also noted by the World Bank because its external debt level has now reached the ceiling of 40 percent to the GDP.

Mutati said this is why he also suspects that the Minister of Finance Alexander Chikwanda was not able to borrow his target of US$2 Billion.

The PF government was planning to and actualy applied to borrow up to $2 billion in Eurobonds last week but was only lent $1.25 Billion.

Mr. Mutati who was Cabinet Minister under the MMD government noted that by issuing the US$1.25 Billion Eurobond, he assumes that Zambia has now also become the highly indebted country in the region.

He said his worry as Member of Parliament representing the people of Lunte constituency is the servicing of the Eurobond whose maturity is 10 years.

The Former Commerce, Trade and Industry Minister is concerned that if this borrowed money is not invested appropriately to give Zambia a return to create capacities for repaying, the burden will be on the future generations who have not even participated in swelling of the country’s debt.

He suggested that what government must  do specifically for the Eurobond money is to create an Independent Monitoring Unit that is going to enhance the levels of accountability of the money that is borrowed.

Mr. Mutati thinks that this Independent Monitoring Unit will assist government to assess how these resources are being deployed as well as provide periodic information to the people of Zambia on the utilization.

He said this in turn will bring government to account and reverse the current situation where government is currently able to borrow without coming to Parliament to explain how the borrowed money is being used.

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