Zambia Not in Debt Crisis-Habazoka

Economics Association of Zambia (EAZ) president Lubinda Habazoka has stuck to his guns that Zambia is not in a debt crisis.

And Habazoka has also wondered why when he takes positions he is either accused of pro and anti-government depending on his views.

Habazoka said there was nothing sinister about what government was doing as regards the debt situation in the country.

He said that government was meeting its routine obligations according to the schedule.

“I have heard stories that no ‘we are in a crisis’ and when I tell people that there is no crisis but yes our debt is very high, they start saying I have been bought. When I was saying ‘don’t get loans’, people were saying ‘you are in the opposition’ so I don’t know now where I stand. I am standing in the middle,” he said.

“Now government is able to meet its obligations. Our laws are very clear, when government gets revenue, the first thing you look at is where you are supposed to pay. So we are paying now, civil servants are getting their salaries on time, government is meeting its obligations. Yes, there are challenges with contractors and what not but that just tells you that that’s not the priority of government. The priority is debt service, salaries and other government expenditure.”

He said, “When you look at our credit rating, it was recently downgraded. Why? It is because we are able to meet our obligations now but there is concern that we will be unable to pay the Eurobonds which are going to fall due in the next five years, because those are bullet payments. So the solution to the problem is to restructure and refinance the debt.”

The outspoken Habazoka also aired his views on the sinking fund.

“I was for a sinking fund years ago but now I am against a sinking fund because time has passed for us to have enough resources in a sinking fund. We have a lot of projects that are competing for government resources…what government should do is refinance the Eurobond. Get other loans that are conventional loans which we are going to start paying interest and principle over time,” he said.

“For example, after 25 years, we are able to service debt. What is the advantage of that? The amount of money that we are spending monthly on servicing all our debt on average is going to reduce because instead of paying that amount in a short period of time, the same loan, you have increased the tenure therefore increasing the repayment period. We can actually borrow more because now we are able to pay the loan.”

He also arrowed his criticism at the Africa Confidential Report that has been crude in their rating of African countries.

“A brief check on their websites has concluded that they have no article on any African country that is positive. Theirs is to paint a gloomy picture about Africa therefore making potential investors become sceptical,” he said.

“Africans continue glorifying their reports denting our image making it even difficult for ourselves on the international stage.”