Economist Warns Impending Debt Swap Has Potential To Worsen Zambia’s Fiscal Deficit
By Michael Kaluba
Economist Professor Oliver Saasa says the impending debt swap for some civil servants by the government has the potential to worsen the country’s fiscal deficit and is tantamount to fiscal indiscipline on the part of the government.
Professor Saasa has also warned that the timing of the debt swap may suggest a lack of fiscal prudence as government allegedly opts to use taxpayers’ money to campaign and exert undue influence on the electoral outcome especially that this activity was neither budgeted for nor approved by parliament.
He has told phoenix news that this decision has the potential to shut down some microfinance institutions that may lose revenue due to the three months loan deduction freeze and has wondered how the government made such declarations before negotiating the terms of these private agreements.
And professor Saasa says it is unsustainable that while the country owes an estimated $7 billion in local debt, over $13 billion in external debt, and has defaulted on various financial obligations, the government has opted to solve civil servant’s debt for short term results by exerting more pressure on taxpayers.
Recently, ministry of information permanent secretary Amos Malupenga said funds meant for the implementation of the debt swap will come from the government treasury with around 60,000 public service workers expected to benefit from the program.
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