PF’s Cash Cow Milked to the Bone. The Patriotic Front is headed for doom financially as one of its main source of illicit cash has been depleted.
According to a senior State House official, Zesco Limited is officially insolvent. The source has explained that President Edgar Lungu, concerned about the current electricity supply situation, asked Zesco to give him a situational analysis and update.
When the classified information was rendered to the President in terms of the financial position of the power utility company, he was shocked to learn that the company is insolvent and it has been in red for the past two years.
In fact for now, Zesco is not even in a position to contract new loans or power purchasing agreements (PPA) from any other supplier so as to mitigate the electricity Fiasco.
Recently, the Zambian government had put up plans to import power from Mozambique but the current financial status of Zesco could not make it possible to do so as International lenders are not willing to take the risks to finance Zesco.
Zesco has been a cash cow for PF’s finacial support. As Zambians may be aware, Zesco pays salaries for PF Secretariat staff and fund other party activities including traditional ceremonies and by-elections. It is Zesco which pays the PF Secretary General, the Deputy Secretary General, Media Director and his deputy. These party functionaries are paid by Zesco using psuedo names with fake National Registration Cards ( NRC) produced by the Office of the President Special Division. There are two Bulky ” Automated Teller Machines” that the Patriotic front government uses. These are the now bankrupt Zesco and the System.
The source said President Edgar Chagwa Lungu is panicking as Zesco is the major donor of cash supply to PF cadres for political mobilisation and violence against the opposition and others deemed to be anti PF.
The situation has resulted into a blessing in disguise as there have been a reduction in political violence due to lack of cash to finance the operatives. ”
President Lungu’s other worry is that the electricity situation will have a direct bearing on low and middle income households especially on the Copperbelt. These include people who run Hair Saloons, Barber Shops and Welding or Metal fabrication businesses,’ the State House source said.
Further, the source said the Financial state that Zesco is in might cause a run on the company by its creditors as you might know that Zambia has been downgraded to a Junk state by several credible international rating agencies.
The potential run could lead to several companies working on the upgrading of electricity generation facilities to abandone works.The Senior State House official says Zambians should brace for worse days economically as the Electricity situation hampered by Zesco’s insolvecy will lead to increased cost of production for goods and services as most business entities will resort to alternative sources of energy.