Debates - Wednesday, 24th June, 2015

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Wednesday, 24th June, 2015

The House met at 1430 hours

[MR SPEAKER in the Chair]






Mr Speaker: Hon. Members, I wish to inform you that, in the absence of Her Honour, the Vice-President, who is attending to other important Government business, the hon. Minister of Justice, Dr Ngosa Simbyakula, MP, has been appointed Acting Leader of Government Business in the House, from today, Wednesday, 24th June, 2015, until further notice.

I thank you.


Mr Speaker: I further wish to inform the House that the Ministry of Community Development, Mother and Child Health has organised two workshops for hon. Members of Parliament on the Social Cash Transfer Scheme (SCTS). The first workshop will be held on 30th June, 2015, at 0900 hours in the Auditorium, Parliament Buildings, for all hon. Members of Parliament whose constituencies are in the fifty districts in which the scheme is currently being implemented.

Hon. Members, you may wish to know that the Government is in the process of rolling out the SCTS to other districts.  Therefore, a second workshop has been organised for the rest of the hon. Members who will not attend the first one to prepare them for the roll-out of the scheme in their districts. The second workshop will be held on 13th July, 2015, at 0900 hours in the Auditorium, Parliament Buildings.

Hon. Members will be notified by the Clerk of the National Assembly which workshop they are eligible to attend.

I thank you.


Mr Speaker: Hon. Members, I also wish to inform you that Parliament Radio has a programme called “Know Your Member of Parliament,” which aims at familiarising members of the public with hon. Members’ personal profiles and discussing their constituency work. Hon. Members who wish to feature on the programme are free to approach Parliament Radio and make arrangements to be included on the programme schedule.

I encourage all hon. Members to take advantage of this platform to engage with their electorate.

I thank you.




551. Mr I Banda (Lumezi) asked the Minister of Education, Science, Vocational Training and Early Education:

(a)    when the roof of the classroom block at Bengamufipa Primary School in Chasefu Parliamentary Constituency, which was blown off, would be replaced;

(b)    what the cause of the delay was;

(c)    what the cost of the works was; and

(d)    what the time frame for completion of the works was.

The Deputy Minister of Education, Science, Vocational Training and Early Education (Mr Mabumba): Mr Speaker, the Government is aware that a 1 x 3 classroom block at the primary school in question had its roof blown off at the start of the 2014/15 Rain Season. However, District Education Board Secretary’s (DEBS) Office and the school’s Parents and Teachers Association (PTA) intervened and replaced the roof in March this year.

Sir, the slight delay was due to the non-availability of funds at both the DEBS Office and the school to use to replace the roof. However, the community was engaged to raise the needed funds.

Mr Speaker, the works were co-ordinated by the PTA, which has not reported to the DEBS Office the amount spent on the repair works.

 Lastly, Sir, the roof has already been repaired. The works took about three months to be completed.

Mr Speaker, let me take this opportunity to thank Hon. Chifumu Banda, SC., and the people of Chasefu for providing the funds that were needed to repair the roof.

I thank you, Mr Speaker.

Mr I. Banda: Mr Speaker, I also thank the community for helping to repair the roof. However, I would like to ask the hon. Minister whether that work was supervised to ensure that it was done up to standard.

 Mr Mabumba: Mr Speaker, like I said, the work was largely undertaken by the PTA. However, the DEBS Office was also involved.

 I thank you, Sir.

Mr Mbewe (Chadiza): Mr Speaker, …

Mr Mbulakulima: On a point of order, Sir.

Mr Speaker: A point of order is raised.

 Mr Mbulakulima: Mr Speaker, I rise on a very serious point of order.

Hon. Opposition Members: Hear, hear!

Mr Mbulakulima: Sir, as you know, I rarely raise points of order. So, when I do, it is of a serious nature.

Mr Speaker: Order!

Mr Mbulakulima: Mr Speaker, as you know, whenever something significant has happened in the country, the hon. Minister responsible over the issue has made a statement in this House to update the nation. I wonder why it is taking so long today. The hon. Minister of Education, Science, Vocational Training and Early Education is absent from the House. Therefore, my point of order is directed to the Leader of Government Business in the House.

Sir, one of the most important factors in our life is education. Most of us who are here are able to speak in this fashion because we had proper education.

Sir, the highest institution of learning in our country, the University of Zambia (UNZA), is not the way it used to be. Four senior members of the management team there have resigned, which is unprecedented in the history of our country, yet the Government is quiet about it. Is the Leader of Government Business in the House in order to keep quiet when such an unprecedented event has happened in our country?

Sir, I need your serious ruling.

Hon. MMD Members: Hear, hear!

Mr Speaker: My ruling is that, if you would like to prompt an immediate response from the right, please, do not hesitate to file a question. I must mention, for the benefit of the House, that there are a number of ministerial statements that are already in the pipeline. I am informed that some of them will be presented in due course while others will coincide with some of the concerns that you are raising, as will be demonstrated in the next day or so. However, for dispatch’s sake, if you would like to get a response on any issue, there is a facility available for that purpose. It is part of our regime.

Mr Mbewe: Mr Speaker, it has become a trend for the Patriotic Front (PF) Government to run away from its responsibilities and push them on Zambians. Where does the Government take the money that this House appropriates for activities like repairing blown roofs of schools and clinics? Instead of dealing with such issues, the PF is now leaving the responsibility to parents.

Mr Mabumba: Mr Speaker, we are not running away from our responsibility of repairing blown-off roofs in schools and clinics. Hon. Mbewe is aware that, for us to develop, we need to partner with the community. That is an important ingredient. Hon. Mbewe should also be aware that some of the user fees that are collected, be it at a primary or secondary school, are used on some of these projects, and user fees are Government funds. Therefore, if the funds are used by the school in collaboration with the community, then, that is a step in the right direction.

I thank you, Sir.


552. Mr Sichula (Nakonde) asked the Minister of Finance:

(a)    how much revenue was lost when the Nakonde Border Post was closed in March 2015, due to disturbances in Tanzania; and

(b)    whether there were any plans to mitigate such losses in the future and, if so, how.

The Deputy Minister of Finance (Mr Mvunga): Mr Speaker, the disturbances at Nakonde Border Post in Tanzania in March, 2015, did not cause any loss of revenue to the Government, but merely delayed the collection of the revenue, as they affected the operations at the border post. When the situation was restored, the goods were subjected to full customs clearance process, including accounting for the taxes due in the respective period.


Mr Speaker: Order, both on the left and right!

Mr Mvunga: Sir, the Government, through the Zambia Revenue Authority (ZRA), is already implementing its modernisation programme which, among other innovations, has resulted in the transition from a system that depended one physically going to the ZRA offices towards a virtual one. In this regard, robust web-based systems, namely, Tax Online and Automated System for Customs Data (ASYCUDA) World for domestic taxes and customs services administration have successfully been implemented. These systems can be accessed from anywhere and at any time using the Internet. Additionally, the ZRA offers an e-payment platform that enables taxpayers to make their payments through some selected commercial banks and Internet banking solutions so that the taxes are collected in an effective, transparent and accountable way using the electronic methods. Taxpayers will also now be able to settle their tax obligations on imports at the nearest ZRA offices through the Integrated Cashiering Platform. Taxpayers can further remit duties and taxes through the Real-Time Gross Settlement (RTGS) system through their commercial banks. The Authority has also introduced pre-clearance, which enables importers or exporters to complete customs formalities before the arrival of their goods at the border. These initiatives will ensure that, even when disturbances occur at the borders, revenue collection will not be adversely disrupted, as taxpayers can pay their duties and taxes, which will, then, be remitted to the Bank of Zambia on time.

I thank you, Sir.

Mr Sichula: Mr Speaker, the hon. Minister has said that there were no revenue losses occasioned by the disturbances at the border post. However, does he not think that losses from such disturbances at the border post can be mitigated by opening an alternative route, such as the Nakonde-Kanyala Road? That could be done by funding the Road Development Agency (RDA) to enable it to open up the road.

Mr Mvunga: Mr Speaker, I think that the hon. Member is raising a totally different debate. The introduction of new border posts is not related to his principal Question, which was on whether we had incurred any losses as a result of the disturbances, and the answer is that there were no losses incurred, but we had some delays in clearing goods. In any event, even if we opened a new border post, should we have such an eventuality, it is possible that the new post would still be affected by the same problems, which are beyond our control. I think that what is important is that the Government does not to lose any revenues arising from any disturbances.

Mr Speaker, I thank you.




Mr Chikwanda: Mr Speaker, I beg to move that the House do favourably consider the Motion to amend the Loans and Guarantees Maximum Amount Amendment Order of 2013 in order to provide for an adjustment in the maximum amounts outstanding on an external loan that the Government may execute.

Mr Speaker, let me start by reminding this august House that, under the Loans and Guarantees (Authorisation) Act, Chapter 366, of the Laws of Zambia, the hon. Minister may raise, from time to time, in the Republic and elsewhere, on behalf of the Government, such loans and in such amounts as he shall, …

Mr Speaker: Hon. Minister of Finance, start by moving the Motion only.

Have you moved your Motion?

Mr Chikwanda: Mr Speaker, I am sorry for the lapse. I have already moved the Motion.

Sir, let me start by reminding this august House that, under the Loans and Guarantees (Authorisation) Act, Cap. 366 of the Laws of Zambia, the hon. Minister may raise, from time to time, in the republic and elsewhere, on behalf of the Government such loans and in such amounts as he shall, from time to time, be authorised by resolution of the National Assembly to prescribe by statutory instrument (SI).

Mr Speaker, pursuant to the Act, in November, 2013, I moved a Motion in this House to amend the Loans and Guarantees (Maximum Amounts) Order of 1998 to provide for an increase in the maximum amount of total outstanding external loans from K20 billion to K35 billion. That amendment was necessary to allow the Government to raise adequate financing for critical projects that would promote and sustain economic growth within the limits prescribed by the law. The Government is grateful to the House that the Motion was approved and the Order of 1998 was amended through SI No. 116 of 2013.

Sir, the Loans and Guarantees (Maximum Amounts) Order of 2013 prescribes that the maximum amount outstanding at any one time on loans raised outside the republic shall not exceed K35 billion. It has become necessary, again, to amend the Order so as to adjust the maximum amount of outstanding external loans.

Mr Speaker, in moving this Motion, I propose an increase in the maximum amount of external loans outstanding at any one time raised outside the republic, from K35 billion to K60 billion.

Mr Speaker, the Treasury requires additional resources to finance some projects in 2015. These funds can only be sourced externally, as opposed to raising them from domestic sources, in order to avoid high domestic interest rates and crowding out the private sector. The proposed borrowing will put the Government in a stronger position to deal with developments in the global and domestic economies, which have rendered some of the assumptions used in formulating the 2015 Budget invalid.

Mr Speaker, Zambia’s external debt currently stands at US$4.8 billion, representing about 18.5 per cent of our Gross Domestic Product (GDP). The domestic debt is K20.5 billion, equivalent to US$3.7 billion, and representing about 14.2 per cent of the GDP. The total public debt is, therefore, around 32.7 per cent of the GDP. As hon. Members of this House may have noted, our external debt position is at 18.5 per cent of the GDP, far below the internationally-accepted threshold of 40 per cent. This position was confirmed by the results of the Debt Sustainability Analysis (DSA) undertaken in June, 2014.

Mr Speaker, let me reiterate that in proposing the adjustment to the maximum amount of external loans outstanding at any time, we are not, in any way, implying that the Government intends to raise loans indiscriminately. As I have indicated in this august House through my various submissions, including my 2014 Budget Speech, the Government will endeavour to contract loans to finance its programmes while paying attention to the inescapable need to remain within sustainable debt levels.

Sir, this Government is fully aware of the adverse effects that imprudent borrowing can have on the economy. Apart from its adverse effect on debt sustainability, excessive government borrowing reduces financial resources available to the private sector for investment. Therefore, the Government takes the issue of public debt sustainability very seriously, and it is for that reason that it will continue to undertake periodic analyses of our capacity to carry the debt burden, meaning, its capacity to repay.

Mr Speaker, as I mentioned to this august House in my Mid-Year Economic and Budget Review Statement, I reiterate that, in order to deal with risks associated with the borrowing of the Eurobond, I have, in accordance with the provisions of the Loans and Guarantees (Authorisation) Act, Cap. 366, of the Laws of Zambia, set up a sinking fund for the purpose of repaying the two Eurobonds. This will also be done with future borrowing on the international capital markets.

Mr Speaker, let me emphasise that the Patriotic Front (PF) Government will ever be mindful of its duty and obligations to posterity, who should not be over-burdened with unsustainable debt repayments that will render future economic growth prospects untenable. That many countries, including the most developed countries, have debts that, in some cases, far exceed their GDPs will never be an excuse for reckless borrowing on our part.

Sir, it is also worth noting that all monies from external borrowing are used on growth-promoting projects, not recurrent expenditures. Significant portions of the proposed borrowing will be used for enhanced recapitalisation of state-sponsored lending institutions, which will support small and medium enterprises (SMEs) in their job creation endeavours. The funds will also go to entities like the Nitrogen Chemicals of Zambia (NCZ) to end the scam of fertiliser imports, and Zambia Railways Limited (ZRL), in order to equip and reinforce the railway system, thereby relieving the current unacceptable pressures on our very costly road network.

Sir, Zambia’s development momentum should not be choked by a lack of the resources needed to sustain project financing. Even though our GDP annual growth rate for the current fiscal year was re-adjusted to 5.8 per cent, we still remain one of the few economies in the world posting respectable growth rates. In the context of the region, South Africa’s economic growth rate for this year is forecast at 2.3 per cent.

Mr Speaker, with increased external borrowing, Zambia’s annual debt service, as a proportion of our export earnings, will stand at between 5 and 6 per cent. In global terms, Zambia’s bankability or viability still remains unassailable. Contrary to the views of our fellow citizens who are inclined to excessive pessimism or have eternal axes to grind, Zambia’s economy is not on the brink of collapse.

Hon. Opposition Members: Umm!

Mr Chikwanda: There are development projects in many places in Zambia, and construction, which is a veritable index of growth, is booming. What is even more encouraging is that much of the development is private-sector-driven. This is consistent with the Government’s overall objective of using the private sector as an engine of growth and job creation while it concentrates on creating a conducive investment environment firmly anchored on policy consistency and predictability.

Mr Speaker, in accordance with the Loans and Guarantees (Authorisation) Act 366 of the Laws of Zambia, I request the House to increase the ceiling on external borrowing from the current K35 billion to K60 billion.

Hon. Opposition Members: No!

Mr Chikwanda: This adjustment will enable the Government to have extended recourse to external financing which, currently, is cheaper than domestic debt.

Mr Speaker, I beg to move.

Mr Muntanga (Kalomo Central): Mr Speaker, it has only been one year since we last increased the external borrowing threshold, but we are already being asked to raise it from K35 billion to K60 billion. Between 2008 and 2013, which was about five years, the threshold was K20 billion. You should see the length of time. Why should this Government have the propensity to borrow continuously? We have just come out of a debt trap through the Highly Indebted Poor Countries (HIPC) initiative debt relief.

Mr Mutelo: True.

Mr Mwiimbu: Poor country.

Mr Muntanga: Sir, we were considered a poor country and Zambians were told to tighten their belts. It took a lot of people to campaign for debt relief. The United Nation Independence Party (UNIP) Government left us in debt. Now, we have a replica of UNIP.

Mr Mutelo: Umm!

Mr Muntanga: Sir, why should an hon. Minister who was in the UNIP Government come in this Government, several years later, and want to take this country back into a debt trap? Why should Zambia continuously have the propensity to think we are better off? Do we want to plunge Zambia into a situation like the one in which Greece is? Greece is in trouble and Greeks are suffering.

Sir, we have resources locally, but we take a lot of time to consider harnessing them. Now, we are being told that we cannot borrow locally. What are we doing to raise revenue locally? We have heard stories and, every time we have talked about extending the revenue base, very little has been done to raise revenue locally. We keep moving forwards and backwards even on the question of which is the correct way to tax the mining sector. I want to inform this House that, as we sit here, we cannot take these issues lightly.

Sir, we have been informed that our external debt is US$4.8 billion while the local debt is K20 billion. However, the hon. Minister has not told us how the US$4.8 billion debt relates to the K35 billion threshold. He has not told us whether he has borrowed the maximum amount that we have allowed him to borrow. Is he implying that he has exceeded the K35 billion we allowed him to borrow?

Mr Speaker, talking about the Eurobond, we are told that US$120 million was given to Zambia Railways Limited (ZRL). There was money that was given even to Mulobezi Railway Line. However, if you go to Mulobezi Railway Line and you are told that, that is what the money was spent, it will be a shame.

Hon. Opposition Members: Hear, hear!

Mr Muntanga: The railway line on which so much borrowed money is said to have been invested is not something we can show off. Some small pieces of wood have been scattered on the ground while the railway line lies on sand. Is that how we will use the money we have borrowed? We have heard stories of some borrowed money being misused even before it is formally brought into the country, yet the hon. Minister of Finance is asking us to agree with him when he says that he wants to borrow more.

Mr Mbewe: Ah!

Mr Muntanga: Sir, when he is given that authority, he will not come to this House to inform us of the money he will borrow and how he will use it. Once that authority is given, he will borrow money and use it in whichever way he wants. We have had cases of money being used on projects other than those in the Budget. The budget is supposed to be adhered to religiously. So, people should try and control themselves. Even at the personal level, if you cannot control your hand and are always dipping into your pocket to take out money, you will soon be broke. Why should Zambia think that it has plenty of money?

Mr Speaker, this Motion calls for a lot of reflection. I do not think the hon. Minister of Finance has sufficiently convinced me that I should support him in increasing the threshold to K60 billion.

Mr Mutelo: No!

Mr Muntanga: I asked him that, if he has problems, he should prepare a mini-Budget to show us, in totality, what his problem is. He is telling us that we are doing well economically, but whom are we better than? The truth of the matter is that we have had projects stall because some funds are not disbursed. At times, we even implement projects using money that is borrowed in advance, yet we want to praise ourselves that we are implementing many projects. Afterwards, the hon. Minister will say that Parliament approved the raising of the debt threshold to K60 billion.

Mr Speaker, the hon. Minister has not given me convincing reasons for me to give him authority to borrow up to K60 billion, one year after raising the threshold to K35 billion. We could have understood if this request had come after five or ten years. Why is this party in Government increasing our debt burden at this rate? You are telling us that you will assess our ability to repay the loan, but we have not seen the assessment and what you are doing to repay the loan. Since the Movement for Multi-party Democracy (MMD) handed over power to you, the first thing you have done is increase the debt. Ideally, we should have seen some reduction in the external debt. If we perpetually increase the external debt and continue to give you latitude to borrow more, we shall be held responsible by the young people in Zambia, on whose shoulders we have placed a burden by taking the country into debt again. Do we have to find ourselves in a situation in which we will have to go back to the lenders to ask them to write off our debt again?

Mr Speaker, I cannot support this Motion.

I thank you, Sir.

Hon. Opposition Members: Hear, hear!

Mr Speaker: I will now give the Floor to the hon. Members for Chipata Central, Lubansenshi, Bweengwa, Mafinga, Monze Central, Lunte and Luena, in that order.

Mr Mtolo (Chipata Central): Mr Speaker, the danger of these kinds of debates is that one risks repeating what another would have spoken.

Sir, the hon. Minister of Finance presented the 2015 Budget under the motto, “Celebrating Our Golden Jubilee as One Zambia One Nation,” and the most important part of it was, “Making Economic Independence a Reality for All.”

Mr Speaker, when you read that and look at what has been happening, you fear that we may actually be consigning the younger generation of this country to a debt trap instead of leaving it economic independence. The debt looks like it will become unsustainable and, instead of having economic independence, we will actually be getting into slavery.

Hon. Opposition Member: Hear, hear!

Mr Mtolo: Mr Speaker, this afternoon, the hon. Minister talked about posterity. It is gratifying that he used that term. However, at the rate we are going, it looks like we may be losing sight of our duty to posterity and putting the younger generation into many problems.

Mr Speaker, when debating the Budget, we were informed that 53 per cent of Zambia’s population of 14 million consisted of people below eighteen years and that more than 90 per cent were people below the age of forty-five. This information was in the Yellow Book.

Sir, by 2024, we will be required to pay back the US$750 million and US$1 billion Eurobonds and these age groups of between eighteen and forty-five years will be in bondage. That is what the House should look at this afternoon, and I wish to say that this is not a partisan issue.

Hon. Opposition Members: Hear, hear!

Mr Mtolo: Unfortunately, by the end of the day, the ‘Ayes’ will have it because of numbers, but one would like to appeal to all the hon. Members of this House, regardless of which political party they represent, to look at this matter critically and objectively.

Mr Speaker, the Zambian Budget for 2015 is about K47 billion yet, this afternoon, the hon. Minister is asking us to extend the external borrowing threshold to K60 billion. In other words, if we are not careful, we could have a Budget that is 100 per cent funded from external borrowing, over and above what we would have approved. It might not be the current hon. Minister who does that, but any of those who will follow him. So, when we see these kinds of figures, all hon. Members of the House should become alert and careful. It is not just a matter of saying, “Yes, let us go ahead and borrow more.” We should also ask ourselves where we are taking our country.

Mr Speaker, to me, K60 billion looks way too high, considering that it has to be raised from K35 billion. Why would we raise the bar to that level? We need to be very careful with things like this.

Sir, like Hon. Muntanga said, it would have been helpful if the hon. Minister had told us where we are in relation to the K35 billion ceiling. Before I took the Floor, I quickly consulted with my former lecturer, Hon. Dr Musokotwane on where we stand in terms of the utilisation of the US$35 billion threshold. He got his calculator and did some calculations, after which he said to me, “Young man, we are almost there,” meaning that we have exhausted the ceiling and the K35 billion is gone. I have no reason to doubt his answer because he is a former hon. Minister of Finance. Probably, that is why the hon. Minister is asking us to raise the ceiling to K60 billion.

Mr Speaker, the hon. Minister is asking too much from us. Could we not moderate the figure of the ceiling? Raising it from K35 billion to K60 billion is almost 100 per cent and that is worrying. You may not reach the K60 billion ceiling but, one day, some overzealous hon. Minister could do just that. Let us be very careful with the ceilings that we set for the country. Surely, K60 billion is on the higher side.

Mr Speaker, another point that I want to raise in my very brief contribution regards the statement that the Government does not want to borrow locally because it might distort many parameters in the country. In my view, we have already distorted the local economy because the interest rate is currently almost at 24 per cent.

Mr Muntanga: It is at 30 per cent.

Mr Mtolo: I have just been corrected that the interest rate is at 30 per cent, but I cannot confirm it. However, we have already raised the local interest rate too high by our local borrowing, be it for the Food Reserve Agency (FRA) or any other Government institution. We are raising the interest rate and making it very difficult for Zambians to borrow money and invest in Zambian businesses. We will only be seeing foreigners coming with money whose source we do not know and taking advantage of business opportunities.

Mr Speaker, what is our position on the funds we have already borrowed? Almost all the projects that we funded using that money have stalled. Did we not borrow enough or did we just misapply the resources? So, instead of just agreeing to what the hon. Minister wants, it is our responsibility, given to us by Zambians, to ask him to give us a comprehensive statement of how the funds were used and how much they have contributed to the development of our economy.

Mr Speaker, we need to know what is happening with the Zambia Electricity Supply Corporation (ZESCO), Zambia Railways Limited (ZRL), the University Teaching Hospital (UTH) and road projects that were funded using the Eurobond. We also need to know …

Dr Kalila: Kafue Gorge.

Mr Mtolo: That is ZESCO.

Sir, we need to know exactly what we did with the funds that we borrowed. US$1.8 billion is a lot of money. We should be shown a table detailing how the money was expended. We should not just come here and put the country into more and more debt. We fought very hard to get out of the debt trap into which we had fallen. We need to be thrifty and apply all the economic principles we learn in school. Let us not do the exact opposite of what we learnt.

Finally, Sir, as much as we want to borrow in order to complete the projects that have stalled, there is another aspect that the hon. Minister never talks about, which is austerity. Just as development is continuous, so is austerity. We do not hear the hon. Minister talk about the Government cutting expenses in some sectors and using money more efficiently. All we see is the continued purchase of big Toyota Land cruiser GX vehicles for hon. Minister by the Government. Those vehicles cost a lot of money. So, how can we say that we need to borrow because we do not have money, yet continue buying such expensive vehicles?

Hon. Opposition Members: Hear, hear!

Mr Mtolo: I do not think that the equation balances. The hon. Minister built the university at which we learnt and what we see happening is at variance with what we learnt. It is just not right. Personally, I would like to hear a little more of austerity in the same way that we hear about borrowing. Let us hear statements like, “Zambia will cut down on this and that,” ...

Hon. Opposition Members: Hear, hear!

Mr Mtolo: … not just about borrowing and asking us to give the hon. Minister a blank cheque. That is dangerous for this economy. The economic independence that you talked about will be completely unattainable.  

Sir, we are now in June, halfway through the year. Can you tell us if we are attaining economic independence in line with the Budget that you presented to us? If you can do that, then, maybe, we can support this Motion. However, even if I decided to support borrowing, it will not be for such a large amount as K60 billion. We need to lower the figure so that we can mitigate the negative consequences that will come with that borrowing. We hear terms like ‘debt sustainability,’ but Hon. Muntanga was very right in asking that hon. Members be encouraged to understand what the term means. I am not even sure whether the officials at the Ministry of Finance are honest enough to conduct genuine assessments of the sustainability of our debt burden.  

Mr Speaker, with those few remarks, …

Hon. Opposition Members: Continue.

Mr Mtolo: Mr Speaker, K60 billion is too high. I think that the hon. Minister should be candid enough to agree that we lower it to a modest amount, say, K40 billion or K45 billion.

With those few remarks, I thank you.


Mr Speaker: Order!

I am making a slight variation to the order of debates in order to allow Hon. Mwiimbu to attend the Committee on Legal Affairs, Governance, Human Rights, Gender Matters and Child Affairs, which is currently considering the amendments to the Referendum Act. If the hon. Member for Lubansenshi permits it, Hon. Mwiimbu may come on the Floor.

Mr Mwiimbu (Monze Central): Mr Speaker, thank you most sincerely for according me this opportunity to speak before my turn.

Mr Speaker, as my two colleagues earlier indicated, this is an issue that is non-partisan, but one that is being debated in the national interest. As I debate, I am reminded of the nauseating days when Zambia was under the debt trap. I recall that, then, the gallant members of Jubilee Zambia who spearheaded the campaign to have Zambia’s debt cancelled worked very hard and gave very prudent reasons to our creditors for them to cancel the debt, and a number of countries responded positively to that cry of the people of Zambia. As I speak on the Floor of this House, those people who fought to get Zambia out of the debt trap are listening to this debate and shuddering at the prospect of what we are proposing to do this afternoon.

Mr Speaker, the hon. Minister of Finance would have us believe that our economy is doing well and that it is better than it was before the Patriotic Front (PF) came into power. However, I went to the bank this morning to buy United States Dollars and found that the exchange rate was K7.5 to US$1. That entails that, for every Dollar that we will borrow, the exchange rate will drive the cost of servicing the debt so high that it will be unsustainable, and I have no doubt in my mind that the Kwacha, our medium of exchange, will continue to melt like butter in the Kalahari Desert.

Hon. Opposition Members: Hear, hear!

Mr Mwiimbu: Mr Speaker, there is no hope that the fall of the Kwacha will be curtailed by this Government. When the PF came into power, the rate was about K4 to US$1. Now, it is almost K8 to US$1. By the end of July, it will be at K8 to US$1. Even to a layman in economics, this shows that the economy is not doing well.

Sir, the cost of doing business in this country keeps going up and people are failing to run their businesses effectively. Further, many people who borrow from banks are failing to pay back their loans. Three years ago, the PF Government implemented some measures to lower the interest rate to 15 per cent. However, the rate has quickly risen to almost 30 per cent and the people of Zambia have been made to bear the burden.

Sir, the hon. Minister of Finance has told us that the Government is not borrowing locally. However, last week, it borrowed money from Stanbic Bank Zambia Limited to buy luxury vehicles for it officers. Is that not borrowing money? For the first time, the Government of the Republic of Zambia has gone to a commercial bank to borrow money to buy utility and personal-to-holder vehicles for its officers.

Hon. Opposition Members: Shame!

Mr Mwiimbu: Mr Speaker, how can the hon. Minister still tell us that the Government is not borrowing locally? He is not telling the truth. The Government has also continued to issue Government bonds on the local market. Is that not borrowing from the local market? The answer is that it is.

Mr Speaker, as Hon. Muntanga has indicated, we were told that US$120 million was spent on Zambia Railways Limited (ZRL). However, those of us whose constituencies are in the Southern Province rely heavily on the railway stem and are aware that almost no rehabilitation work that was promised has been done. Even now, the train moves at less than 30 km per hour because the Government has not done what it promised to do when it borrowed the US$750 million, which also included the rehabilitation of the generators in our power stations so as to end load shedding. However, load shedding has become worse. In some townships, there is no power for more than three consecutive days. How can the Government tell us that it is prudent in its utilisation of borrowed funds? That is not correct.

Mr Speaker, the World Bank (WB) is on record advising this Government to put austerity measures in place and to exercise prudence in the manner we borrow money because the borrowing is not sustainable. As the Government of the Republic of Zambia (GRZ), are we now telling the WB and the International Monetary Fund (IMF) that they are wrong and that the Zambian Government is right?

Mr Speaker, there have been reports in the international media that the GRZ intends to sell the Eurobonds to Vulture Funds …

Hon. Opposition Members: Aah!

Mr Mwiimbu: Yes!

Mr Mwiimbu: … because the repayments are not sustainable. The Government will not be able to pay back. So, why should we continue borrowing?

Mr Mbewe: On a point of order, Sir.

Mr Speaker: Given the nature of this debate, I will not allow points of order.

Hon. Member for Monze Central, you may continue.

Mr Mwiimbu: Much obliged, Mr Speaker,

Sir, I challenge my colleagues on your right to dispute the international media reports on the sustainability of the debts that this country is incurring. I have no doubt in my mind that the international financiers will be willingly continue to lend Zambia money not because we are able to pay back, but because we have assets that they can grab and they are able to give conditions that we cannot refuse. I am aware of one country that has been giving Zambia money and, as a result, that country’s nationals, most of who whom are of very questionable character, have been allowed into Zambia because that is one of the conditions that our Government has been given to be able to access the money. Why should we allow ourselves to be used by other countries that wish to offload its excess citizens? Why should we be that reckless?

Mr Speaker, since I am pressed for time, I want to state that, even if I will be the only one who votes against this Motion, I will do so. Further, if your left does not meet the required number of hon. Members to call for a division, I will take my stand and fail because I know that it is my responsibility, on behalf of Zambians, to say no to reckless borrowing.

Mr Speaker, I thank you.

Hon. Opposition Members: Hear, hear!

Mr Speaker: Hon. Member for Lubansenshi, you may take the Floor.

Mr Mbewe: Hammer, hammer!

Mr Mucheleka (Lubansenshi): Utekanye sana, iwe.

Mr Mbewe: Hammer!

Mr Mucheleka: Utekanye sana.

Mr Speaker: Order, hon. Member for Chadiza!


Mr Mucheleka: Mr Speaker, I thank you for the opportunity you have given me to debate the Motion on the Floor of this House.

Sir, the Motion before us so serious that it requires sober reflection from all of us.

Mr Speaker, I want it to put on record my assurance to Hon. Jack Mwiimbu that, if he is the first to refuse to support this Motion, I will be the second, the reason being that we are seriously sliding into a debt crisis. That is a fact.

Mr Speaker, it took the United National Independence Party (UNIP) twenty-seven years to accumulate a US$7.5 billion debt and the Jubilee 2000 Campaign worked very hard to get the international community, and multilateral and bilateral institutions to write off that debt. However, we are only four years under the Patriotic Front (PF) and we may surpass the US$7.5 billion. What is more worrying is that the capacity of our economy to service this debt is very low. On that score, I agree with Hon. Mtolo that the debt sustainability analysis that has been done by the Ministry of Finance is very doubtful, particularly the figures. We, therefore, must worry about pushing Zambia into another debt crisis and refuse to do so, especially since there is no prudent management of the resources that we borrow. We all know that because we have seen and read that most of the borrowed funds are not even used for the intended purpose.

Sir, we, politicians, call for caution, we may be considered to be merely politicking, but I am aware that the Central Bank Governor is on record saying that borrowed funds are not used for their intended purpose. Most of those funds have fallen victim to corruption. For example, Zambia Railways Limited (ZRL), which has already mentioned, was given US$120 million from the Eurobond. However, no one knows what this money has been used for, and yet we are being told, today, that the ZRL requires further recapitalisation.

Mr Speaker, the other challenge in public institutions is that there is seriously poor corporate governance and most of them have become, for lack of a better word, cash cows for political cadres.

Mr Mbewe: Hah!

Mr Mucheleka: The institutions are being used to milk the funds that should be used to serve the Zambian people. So, why should we borrow funds that will be stolen or misapplied or we know that it will not be ring-fenced? We, first and foremost, must strengthen our institutions and improve corporate governance so that, when they are given funds, …


Mr Speaker: Order on my right!

Mr Mucheleka: …we will know that the funds will be used for the intended purpose.

Mr Speaker, many of the boards or managements of the institutions to which the funds are channelled headed cadres who have no iota of understanding of good corporate governance. If you put a cadre who insults people as Chairperson, what do you expect? It will be garbage in, garbage out.

Mr Mbewe: Hah!

Mr Mucheleka: Personally, I am against this Motion and I do not intend to support it.

Mr Speaker, I want to put it on record that this Parliament is not a rubber stamp and it must be taken seriously. We are here to provide checks and balances. When you bring such Motions, are you sure that you are doing it in the interest of the Zambian people? I have serious doubts about that.

Sir, I would like to inform this Executive that the Zambian people can be mobilised. As you see us here, we have not lost our steam. Some of us are still civil society activists.  

Mr Mbewe: Um, I like that!

Mr Mucheleka: We can take off our jackets, go out on the streets …

Mr Speaker: Order!

Hon. Member, you see what you are doing? You are debating yourself.


Mr Speaker: You have stopped debating the Motion and started debating yourself and other hon. Members, contrary to our very well-established conventions.

Mr Mucheleka: I am much obliged, Mr Speaker. I take your guidance.

Sir, if the civil society has lost its steam, then, this Motion can rekindle their spirit and will to speak on behalf of the Zambian people. Those streets can be filled up with people marching against careless borrowing. Perhaps, that is what the Zambian people need to do.

Mr Speaker, in 2000, the civil society, led by the late Cardinal Medardo Mazombwe, held talks with the Government, which had been insulting the civil society but, at least, the then Ruling Party, the Movement for Multi-party Democracy (MMD), provided engaged the civil society and, through their concerted effort, our debt was written off. Even this time around, we need those same organisations to rise to the occasion. If they are listing, this is the time to stand in solidarity with the people of Zambia because, when the Government borrows carelessly, it basically places the premium on the poor people because it is they who will repay the money, not the ones borrowing, who may not even be there when the loan needs to be paid back.

Sir, when you borrow, you take away from the poor because the money that is supposed to be used to provide services to the poor will be used to service the loans that we contract. It is the poor people who will not be able to access medication, quality education and have good roads. So, it is they who will bear the brunt.

Sir, the people of Lubansenshi in Luwingu District of Northern Province are saying that is enough is enough. The good will that was extended to this Government has been taken for granted, and that is not the way to go.

Hon. Opposition Member: Squandered.

Mr Mucheleka: The Government borrowed US$1 billion and, then, borrowed another loan of US$750 million within two years. That money should have been used to construct or renovate some of the roads that we have been talking about. However, as I speak, the roads in Lubansenshi Constituency are almost impassable. In the next three months, it will start raining and farmers’ crop will go to waste because there is no money to use on working on the roads. Money was borrowed and used to fund Phase I of the Link Zambia 8000 Project, but most of the roads under that phase are still incomplete, and that is the same story concerning infrastructure in the health, agricultural and other sectors. Let me repeat that borrowing has become an avenue for corruption because there is an element of colluding and single sourcing while transparency and accountability have been thrown to the wind. How sure are we that, if we allow more borrowing, this time around, there will be prudent use of the resources and enhanced prudence and accountability, in which you do not seem to be interested? We must be concerned about enhancing controls and restructuring of State-owned enterprises and regulatory bodies because most of them have become deployment centres for PF cadres.

Sir, how can you run a country in which you have deployed cadres everywhere? This is something that we only saw during the One-party State. How can someone hold a senior party position and preside over a State-owned enterprise? We are supposed to use those businesses to generate the wealth that we need to fund our education system, or build hospitals in Lubansenshi, schools in Kalomo …

Mr Muntanga interjected.

Mr Mucheleka: … and more hospitals in Chipata and countrywide.

Mr Speaker, why should we borrow instead of developing our own resources using State-owned enterprises? I do not know any institution in this country that has been able to declare dividends for its shareholder, the Government, on behalf of the Zambian people. Most parastatals have become cost centres, and that is where you have deployed cadres who are engaging in corruption and stealing from the poor.

Sir, it is the poor who will bear the burden of these loans, and that is why any well-meaning Zambian in this Parliament should vote against this Motion. Even if it is allowed for a Motion to be adopted using the arrogance of numbers, if that is what you take pride in, we want to put it on record that we stand in solidarity with the people of Zambia in opposing the Motion. It should not be supported by Zambians, including hon. Members of Parliament.

Mr Speaker, posterity will judge all of us very harshly if we pass this Motion. Let us reflect. This is not the time to allow the Government to carelessly borrow money that it will not even be able to use properly. It will not be able to account for it because it has failed to account for the Eurobond …

Hon. Opposition Members: Hear, hear!

Mr Mucheleka: … and the rest of the money that it has already borrowed.

Sir, I appeal to my colleagues on your left not support this Motion.

I thank you, Sir.

Hon. Opposition Members: Hear, hear!

Mr Shakafuswa rose.

Mr Speaker: For those who walked in after we had commenced Business, be informed that I have a list that I announced and I am following it in giving for Floor to hon. Members.

Mr Shakafuswa interjected

Mr Speaker: So, you may wish to consult your neighbours.

What were you saying, hon. Member for Katuba?

Mr Shakafuswa: You will add us afterwards.


Mr Hamududu (Bweengwa): Mr Speaker, I think that we are now entering into a vicious cycle of borrowing and that, until we delve into the factors that are driving us into debt, we will keep borrowing. What is driving our propensity to borrow?

Sir, in the hon. Minister of Finance’s first Budget Address, he rightly thanked the Movement for Multi-party Democracy (MMD) Government for leaving a strong economy, …

Dr Kalila: Yes!

Mr Hamududu: … as the macro-economic fundamentals were actually getting to where they needed to be after a lot of hard work over the years. In 1991, this country was basically bankrupt and the incoming Government steered it through a very difficult time to achieve the macro-economic stability that the hon. Minister of Finance acknowledged in his first Budget Address on the first page. I wonder what the next Government will say about the Patriotic Front (PF).


Mr Hamududu: It will probably be that the PF has tampered with the stability that was earned with sweat and sacrifice by the Zambian people.

Sir, this issue is not about the hon. Minister of Finance. There is something fundamentally wrong about the governance of this country.

Hon. Opposition Members: Hear, hear!

Mr Hamududu: The spending in this country is not at the behest of the hon. Minister of Finance. It is a constitutional issue. So, the issue of the Constitution must be addressed. There is a powerful man who can override the Budget and instruct hon. Ministers to build some road today and no hon. Minister can say no. You will understand this if you understand governance.

Hon. Opposition Member: Yes!

Mr Hamududu: There is one hon. Minister in the current Constitution, who is called the Chief Minister, the President, who has too much power, and there are many things that I can itemise to support what I am saying. For example, the creation of districts was not in the Budget and we are on record warning the Executive at the very beginning …

Hon. Opposition members: Hear, hear!

Mr Hamududu: … that it would cause a Budget overrun, but we looked like fanatics then. However, our fears have come true. Our expenditure is higher than our revenue. In fact, the expenditure is unlawful because we spend beyond what we approve in the Budget.

Dr Kalila: Exactly.

Mr Hamududu: It is an affront to this House.

Hon. Opposition members: Hear, hear!

Mr Hamududu: There is fiscal indiscipline at the behest of the political leadership. Over thirty districts have been created and universities being built here and there. Roads are also being constructed everywhere.  

Mr Speaker, …


Mr Speaker: Order!

Hon. Member for Bweengwa, just a moment. I know that this is a very emotive, topical and serious subject, but that is not the reason we should flout our own rules. Maintain total silence as the hon. Member debates.

Hon. Hamududu, you may continue.

Mr Hamududu: Mr Speaker, I pity the hon. Minister of Finance because what is happening now is basically the fruition of what has been happening over the years. The propensity to spend more than what is in the Budget started from the first day of the PF Government. There have been commissions of inquiry, reversal of some policies and programmes, and an unprecedented number of by-elections. Now, we have reached the peak. The cup is too full and has started overflowing.

Sir, until we go into the reasons we have reached where we are, we may not solve the problem. So, let us delve into the causes of the continuous Budget overrun. It is unlawful for one person to start constructing a road that is not included in the Budget. When we pass the Appropriation Bill in this House, it becomes a law. So, the Budget is law, yet you will hear of roads being pronounced and worked on that are not in the Budget. That is the cause of the pressure on the Treasury. Currently, we have many unpaid-for completed works on which interest is mounting. The borrowing could be inevitable, but it must be a small measure. The real measure is to address the fundamentals. Otherwise, we will keep borrowing, but nothing will happen. I think that this discussion should have been preceded by measures to correct the drivers in this Budget deficit. Evidence is there.  We have an ever-increasing wage bill, yet the civil servants are not well paid. Who is raising the personal emoluments-related expenditure?

Mr Speaker, there are too many trips. Why do we have two officers running a single district? A district is run by a Town Clerk or a Council Secretary. So, the Government should do away with District Commissioners (DCs) save more money. With the DCs, we have continued to hide political functionaries in Government offices. This is unnecessary expenditure. We are also opening new embassies. With the enhanced information and communications technology (ICT), the developed countries are downsizing their embassies because it is a wasteful expenditure. If you want to go to our former colonial master, the United Kingdom (UK), or Canada, you will have to apply for a visa through South Africa. Do you need to send someone to Korea to tell Koreans about Zambia when that information is available on the Internet?


Mr Hamududu: Mr Speaker, we need to downsize some of these things. I am not just talking anyhow. We must respect science because there are fundamentals in financial management. You should tone down.

Sir, the hon. Minister of Finance should have exhausted all areas of cost-saving. Actually, he should have raised a number of issues that we need to do in the Cabinet. At the behest of the President, the hon. Minister should have presented, ministry by ministry, the things that we can do to lower our expenditure. For example, the Ministry of Local Government and Housing should make the councils work. The money is dripping out. You know what would happen? You would have an ineffective Public Service. When a car is not serviced, you spend more money on fuel and lubricants. You do not save money by not servicing it. What is happening now is that we are spending so much money on a very ineffective Public Service that is not delivering. Therefore, you are using more money to do less. We need to streamline the management of the Public Service, as explained by Hon. Mucheleka. The corporate governance must be improved so that we can do more with less money. That is the principle.

Mr Speaker, I remember that, when President Mogae assumed the Presidency of Botswana, he said that he would run that country like a company. We must respect those principles and the Chief Minister of this country must show leadership. This country is going down the drain and this man must change cause. Currently, the main function of the President has been that of swearing-in his appointees and I have never seen another country where that is the case. As things are, we might as well change the Constitution so that we also have a Prime Minister ...

Hon. Opposition Members: Hear, hear!

Mr Hamududu: ... who will run the Government and be accountable. Namibia has done it already. Currently, there is a deficit in this country. The President and his Vice are busy with ceremonial things. So, we need a Prime Minister who will sit here and account for everything, appoint the Permanent Secretaries (PSs) and make the Civil Service work. Currently, the one who appoints hon. Ministers or PSs is not even on the ground. When he moves, it is in cars with tinted windows that blind people from what is really happening on the ground.  

Mr Speaker, in Namibia, they have a President, a Vice-President and a Prime Minister, and the Prime Minister runs the Public Service. He is the one who hires and fires workers. Here, it is different. Right now, we do not know where Her Honour the Vice-President is, who is in charge of the Public Service, as she is the one who runs things at Cabinet Office. Who will fine-tune the effectiveness of the Civil Service?

Mr Nkombo: She is in Mulobezi!

Mr Hamududu: Mr Speaker, who recommends the appointment of PSs and other Controlling Officers (COs)? How does one appoint a person without any financial literacy as CO? Just this week, we were talking about ineffective councils and, unbelievably, no one is concerned about that. Katima Mulilo and Sesheke are just separated by a river and Namibians used to cross into Sesheke to visit our town. However, within twenty-years, Katima Mulilo has become a proper town while Sesheke is still just a confused place.


Mr Hamududu: You say that the councils are under the Local Government Service Commission (LGSC). Do you mean that, today, there are no graduates who can run councils and straighten up things? Why do you continue using the same people who are destroying councils?

Ms Lubezhi: Cadres!

Mr Hamududu: Mr Speaker, they use money carelessly.  This country has the worst costing of everything. The cost of building a road, per kilometre, is the highest. For example, I attended a council meeting in which we resolved to sink a few boreholes using the Constituency Development Fund (CDF) at K35,000, yet my brother sunk a borehole at my mother’s place at only K24,000, and that amount included the costs, including that of mobilising a driller from here to Monze. Obviously, there is something wrong with the costing of public works, and these are the issues we must deal with. If we go in that direction, we can save money and create fiscal space to deal with the financial deficit that is troubling the hon. Minister of Finance.

Sir, as Chairperson of the Committee on Estimates, we toured the country and found that all the road projects had stalled. Therefore, it is becoming costly. Money must be found because, if we continue in this direction, even if we change the Government, the debt will still be there. So, we must find a smart way to dismantle the debt. We can save money by doing away with unnecessary expenditure before we resort to excessive borrowing. Let us not be in a hurry to borrow. After we have finished the house-keeping issues, then, we can borrow a little to augment what we would have realised.  That is the route we must take.

Sir, the hon. Minister of Finance must be helped by all the other hon. Ministers, such as the ones for Agriculture and Livestock, and Local Government and Housing. They know what is wrong. All this is happening because they demand more money than they bring in. Let them use less to do more. Together, they can do something. Here we are.

Sir, how much money have we spent on the Constitution-making process? You know what people want. Even in this House, we are busy arguing and failing to deliver a Constitution. The current Constitution of this country is to anti-development and financial discipline. We know that the President can pronounce anything and no one will object. He can actually engage in lawlessness by causing expenditure that is not in the Budget. Even what we are dealing with is not in the Budget. Therefore, it is unlawful.  

Dr Kalila: Lawlessness.

Mr Hamududu: Mr Speaker, all countries have now moved from supplementary expenditure. We should not expend public resources before they are approved by the House. In this country, we want this House to just rubber-stamp what has already been spent. Some of these practices are remnants of the One-party State. We are under a multi-party dispensation, yet one person once praised another as having been a good President because he surrendered power after losing an election. Is that being good? When a person loses an election, is there anything he can do other than giving up the position? After all, we made him President. So, it is he who must thank us.


Mr Hamududu: Mr Speaker, Zambians think the other way round. We are a country of inde bwanas.


Mr Hamududu: So, we will not develop.

Mr Speaker: What does that expression mean?

Mr Hamududu: It means ‘yes, boss.’    


Mr Hamududu: Are we a kingdom? Can no one can raise an alarm. You are being unfair to your President by not telling him that things are not right. Why do you sit there and just keep quiet? You must talk. Many years ago, there were people who shone, and the hon. Minister of Finance must do what he did in the past. He was one of the key people then. When the United National Independence Party (UNIP) was at its peak in popularity, he wanted to resign because he had noticed that some things were not right. Then, it was even difficult to resign from a ministerial position. The UNIP Regime should have been voted out of power by 1980 because the next ten years of its rule were full of nothing, but destruction of the economy. By 1991, the destruction was visible to all. So, I advise the hon. Minister of Finance to withdraw this Motion and come up with another that will indicate some of the savings that can be made in the current Budget.

Hon. Opposition Members: Hear, hear!

Mr Hamududu: Mr Speaker, I have no problem with borrowing if it is based on the right principles. All countries borrow, but they do so responsibly. What we want to do now is allow the hon. Minister of Finance to borrow irresponsibly. So, we will defeat this Motion. After all, we have the numbers on our side.

Hon. PF Member: How can you?

Mr Hamududu: People cannot come from Mulobezi now because there is no plane. I know that.


Mr Hamududu: So, please, withdraw this Motion and bring another one to rationalise your expenditure. The Government needs to cut down on trips because hon. Ministers travel to inspect projects as if they are engineers when they do not even know the specifications of roads and the mechanics of railways.


Mr Hamududu: Make the Civil Service work. Appoint competent PSs and introduce performance management in the Civil Service so that those who fail to perform can be identified and fired like it is done in Namibia. Read about Namibia. It is now becoming like Rwanda in terms of performance. It amended its Constitution before its elections because it had identified the problem with its Constitution, fine-tuned it and put a governance system that delivers. In this country, the problem lies in our faulty Constitution. So, if we do not address the issue of the Constitution, we will continue to experience bad governance. This Motion is an indication of bad governance. You want to change what people want when they have suggested how we can improve governance so that, going forward, we will have qualified PSs and functioning councils. The hon. Minister of Local Government and Housing is helpless to do anything and it is better he resigns so that we can save money.


Mr Hamududu: He is failing to make the councils work.

Hon. Opposition Members: Hear, hear!

Mr Hamududu: I am talking of a sub-national Government that is easy to deal with. Tell me, do you need to be a rocket scientist to make councils functional? The hon. Minister of Education, Science, Vocational Training and Early Education must rationalise the universities. The University of Zambia (UNZA) has serious problems, among them, outstanding bills, yet you are opening new universities. What are you trying to do?

Sir, we will vote against the Motion because it is not helpful to our country. We are not against borrowing, but we must borrow for the right reasons and augment that with some domestic measures. Even at home, you cannot sell your car or house in order to pay a debt, yet continue borrowing, because you will end up eating your future today. That is what happened to us in the past. Those who went to universities in the early days fed the fish at the Goma Lakes bread and ate too much at the expense of the generations that followed as if it was at a hotel.


Mr Hamududu: They ate even what they should have left posterity, who now have nothing. Let us do something about it. So, I advise the hon. Minister to withdraw the Motion. If he needs help, he can ask us because we are patriots. We can join his committees and advise him on how the country can save money.

I thank you, Sir.

Hon. Opposition Members: Hear, hear!

Mr Chikwanda interjected.
Ms Namugala (Mafinga): Mr Speaker, maybe, the hon. Minister would like to withdraw the Motion before I also debate.


Hon. Opposition Members: Hear, hear!

Ms Namugala: Sir, let me pick my debate up from where Hon. Hamududu ended.

Sir, the hon. Minister of Finance must remember or realise that, indeed, running a country is like running a business. When you are running a business and you are inefficient in the utilisation of your resources, you will run to the bank to borrow and, after borrowing, you, again, misuse the money until the company becomes bankrupt. This is the situation in which we find ourselves.

Mr Speaker, the hon. Minister of Finance indicated that Cap 366, Section (3) of the Laws of Zambia was amended in 2013 by the Patriotic Front (PF) Government. The previous amendment was in 1998. So, there was no amendment between 1998 and 2013 because the economy was prudently managed.

Hon. Opposition Members: Hear, hear!

Ms Namugala: Sir, just two years after the last amendment, this hon. Minister wants us to authorise him, through the issuance of a statutory instrument, to borrow up to K60 billion which, in un-rebased terms, is K60 trillion.

Hon. Opposition Members: Aah!

Mr Mbulakulima: More than the Budget.

Ms Namugala: More than the Budget for 2015, which is K46 trillion. Therefore, should we trust the hon. Minister of Finance?

Hon. Opposition Members: No!

Ms Namugala: Sir, for me, as a mother and representative of the people of Mafinga, the answer is no, I cannot trust him …

Hon. Opposition Members: Hear, hear!

Ms Namugala: … because he has not exhibited the leadership expected of a man who is, with due respect, a senior citizen. He intends to contract debt for my grandchildren to repay. He has no right to do that because he will not be there.

Hon. Opposition Members: Hear, hear!
Ms Namugala: Mr Speaker, this is reckless borrowing.

Hon. Opposition Members: Hear, hear!

Ms Namugala:  He wants us to trust him when, in the 2015 Budget Address he introduced a new mining tax regime for which we all commended him because, for the first time, we felt that the Government of the Republic of Zambia (GRZ) had begun to make the multi-national corporations (MNCs) in the mining sector pay the tax that is due to the people of Zambia. However, he and his colleagues decided to reverse that measure without his coming back to us to give us the rationale. When he introduced that measure, we asked him if he had consulted and investigated the capacity of the Zambia Revenue Authority (ZRA) to collect the tax from the mining houses. His answer was, “Yes.”

Sir, he has now u-turned 360 degrees …

Hon. Opposition Members: Hear, hear!

Ms Namugala: … and caused a Budget deficit because of imprudent management of the economy.    

Mr Speaker, I cannot trust this hon. Minister of Finance …

Hon. Opposition Members: Hear, hear!

Ms Namugala: … to borrow US$1 more than what he has already borrowed until he first puts his house in order, takes care of the Budget leakages, ensures prudent utilisation of the local resources and, as Hon. Hamududu has said, cuts the suit to the size of the cloth.

Sir, the hon. Minister has come to this House to ask for a blank cheque yet, a few days ago, he …


Mr Speaker: Order, on my left!

Ms Namugala: ... came to this House and painted a very gloomy picture of our economy. Until day, he had been telling us that we were experiencing a trade deficit and that our gross domestic product (GDP) growth would reduce to just below 6 per cent. He also said that the country should brace itself for the worst. Today, as though to add insult to injury, he has come and said, “I, the hon. Minister of Finance who has given you this gloomy picture, want you to trust me with a black cheque to borrow more than the Budget that you authorised me for 2015.” So, if there will five hon. Members of Parliament who say ‘no’, I will be one of them.

Sir, I want the PF Government to realise that I was one of its supporters in the 2015 Presidential Elections and, therefore, I mean well ...

Hon. Opposition Members: Hear, hear!

Ms Namugala: ... when I criticise its wrong policies. It is not prudent for the hon. Minister of Finance to incur on future generations …


Mr Speaker: Order!

My vantage point allows me to see where everyone seated and what they are doing. I am just being magnanimous in giving you who are busy debating from your seats the chance to reflect on your conduct. Otherwise, I will begin sending you out of the Chamber very shortly.

May the hon. Member for Mafinga continue.

 Ms Namugala: Mr Speaker, as a mother and one of the hon. Members who have been in this House for quite a long time, I want to tell the House that I was here when the gallant men and women of this country went around the world asking for our debt to be forgiven.

Rev. Lt-Gen. Shikapwasha: I was the Minister of Foreign Affairs.

Ms Namugala: It was not enjoyable to be a leader in Zambia then because we said that we were a highly indebted poor country with pride. We took pride in being called highly indebted and poor because we had reached a point where there was no other way of saving the economy of this country. We did it and, through that sweat, we got to where we are today, yet the hon. Minister of Finance wants to reverse all those gains.

Mr Speaker, I do not want my children to ever take pride in calling themselves highly indebted and poor.

Mr Muchima: Again!

Ms Namugala: Sir, the hon. Minister should do some housekeeping. As Hon. Hamududu has said, let us improve the country’s productive capacity within the resources that we have and diversify this economy.

Mr Speaker: Order!

Business was suspended from 1615 hours until 1630 hours.

[MR SPEAKER in the Chair]

Ms Namugala: Mr Speaker, before business was suspended, I was advising the hon. Minister of Finance to rationalise expenditure by ensuring that there was prudent management of the resources generated locally.

 Mr Speaker, as we have heard before, Zambia is not a poor country. The Budget has been rising since the PF came into power. It is its implementation that has been poor. So, the hon. Minister of Finance should go back to his desk, sit down and see where he can cut expenditure before he can come to this House to ask for a blank cheque for him to run around borrowing recklessly. Reckless borrowing has, in the past, plunged this country to the bottom of the economic ladder in the region.

Mr Speaker, poverty has a female’s face because it is the women who suffer when things get really bad because of the bad decisions that men make on their behalf. It is also women and children who will suffer as a consequence of the decisions that will be made by hon. Minister of Finance.

Sir, the hon. Minister of Finance must realise that the majority of Zambia’s population are young people who will not forgive us, as the House sitting here today, for allowing him to increase his borrowing threshold from the current K35 billion to K60 billion. As I have said before, I supported the PF in the last Presidential Elections. So, I mean well. That is why I want him to go and tell the President that, even though I supported the PF, I do not agree that the hon. Minister of Finance who seated here today has the levels of accountability and responsibility to the people of Zambia that should make us give him a blank cheque. I do not believe that he is accountable enough to us and, through us, the people of Zambia, to prudently manage the resources he seeks through the amendment of Chapter 366 of the Laws of Zambia.

Mr Speaker, I know that the hon. Minister is a businessman. So, I want to remind him that imprudent borrowing is wrong. It is not good economic management to come here to ask for a blank cheque.

With those words, …

Hon. MMD Member: Continue!

Ms Namugala: Sir, I was advised to cry on behalf of the children and women of Zambia, but I will not do that because I believe that he will withdraw this proposed amendment.

I thank you, Sir.

Hon. Opposition Members: Hear, hear!

Mr Mutati (Lunte): Mr Speaker, we are facing very difficult times, challenged by the increasing fiscal deficit and the management of public the debt. It is projected that, by the end of the year, our fiscal deficit might rise to 7.7 per cent of the gross domestic product (GDP), with the public debt approaching US$10 billion. So, our monetary policy is under severe stress.

Sir, the Bank of Zambia Governor and his colleagues have attempted to tighten liquidity to revise the policy rates. However, they can only go so far. The measures that they are implementing will not create macro-economic stability without addressing the main disease, which is fiscal expenditure. We are borrowing so much that the cost of money is high and our exchange rate is weak. As a result, the private sector, particularly the small and medium enterprises (SMEs) are chocking and suffocating. They are barely surviving, let alone growing.

Sir, I know that the hon. Minister of Finance is a good man. However, we are at a juncture where goodness is not sufficient.

Hon. Opposition Members: Hear, hear!

Mr Mutati: Mr Speaker, he needs to tell his colleagues to stop it. For example, in the fuel procurement process, instead of advancing a legalistic defence of issues, transparency must be at the centre. The current procurement system is costing you a lot.

Mr Mbewe: Si aziba uyu.


Mr Mutati: It is not sustainable.

Mr Speaker: May the hon. Member for Chadiza Parliamentary Constituency leave the Chamber. We will see you tomorrow.

Mr Mbewe left the Assembly Chamber.

Hon. Government Members: Hear, hear!

Mr Mutati: Mr Speaker, it is time the hon. Minister of Finance put a stop to this because the current model is not working. He needs to amputate the limb that is the middlemen. Only then can he have results and save a lot.

Sir, at the investment level, there are choices that the Governments must make. Sometimes, you wonder what the rationale for making some choices is. I borrow a Eurobond and use it on Zambia Railways Limited (ZRL) when I know that there are sectors of the economy where I can invest it and derive the most dividends for the people of Zambia. Let me say that I have nothing against the ZRL. However, would it not have been more prudent to first address the problems facing Indeni Oil Refinery (IOR), namely, the hydrocracker and the pipeline, in order to save a lot more rather than remain with a train that continues to move at 30 km per hour despite having consumed US$120 million? You have to make those hard choices in order to save this country. Hon. Minister, it within your capabilities to save this country. All you have to do is tell your colleagues to stop what they are doing. All the new projects, particularly the prestige ones, must be suspended because you do not have money to fund them. All new projects must be suspended.

Sir, sometimes one wonders. We are renovating an airport, but the scope of works includes the construction of a five-star hotel. Why should the Government borrow to construct a five-star hotel? Is that prudent? That is what we are actually talking about when we say that you have to make hard choices in order to achieve certain things. So, tell your colleagues to stop it because hon. Ministers of Finance, by their nature, must not be loved. If you are good to your colleagues, they will run you into the mud.

Hon. MMD Members: Hear, hear!

Mr Mutati: Sir, you need to be strong to tell the hon. Minister of Agriculture and Livestock that you cannot subsidise the export of maize or consumption because that is losing the country money. So, before we begin to borrow, why can we not deal with the necessary accompanying fiscal measures and say, “From the measures that we effected, we have been able to save so many trillions”? That should be the first step. Once we are persuaded that there is a genuine effort that will benefit the people of Zambia, then, we will agree that we are going in the right direction. Let us not take the easy way out. It is painless to borrow because it is just paper work, bureaucracy and travelling to London and New York with the bankers, who will love you because you speak well before them. However, what is crucial is the ability to pay back and employ those resources to generate economic activity.

Mr Speaker, we have seen that the consequence of the borrowing of the US$1.7 billion is a downgrade of the GDP. So, something is not making sense. Let us get back to the basics. You must not put money in projects that do not work. You have a very difficult job in the sense that your colleagues think that your cheque book has no limit and that they should get anything they want. However, we are at the juncture where this should not happen. So, going forward, your motto should be ‘Stop it’. Any circular letter that you send to your ministers should have, ‘Stop it’ stamped on it before the subject because we need to save the country by saving money. At the rate we are going, we are reducing our ability not only to repay, but to grow the economy as well. Like I said, you are a very good man, but we are at a juncture where goodness must be shelved, …

Mr Muntanga: Hear, hear!

Mr Mutati: … especially since you are dealing with a congregation that has a propensity to spend on projects that have doubtful results, procurement processes and costing. Like Hon. Hamududu said, the cost of tarring a road in this country is the highest in the region. The other day, I visited a Multi-facility Economic Zone (MFEZ) and saw that it is progressing. So, I asked the Chinese who are tarring the road in the zone how much it cost them to tar 1 km. the answer I was given was that, because they are the ones investing in the zone, it is costing them US$350,000. However, when you go to the Road Development Agency (RDA), you will be told that the same project costs US$1 million. Are they using different types of sand and stone? That is where the problem is, and that is why we are saying, “Stop it,” hon. Minister.

I thank you, Sir.

Hon. Opposition Members: Hear, hear!

Ms Imenda (Luena): Mr Speaker, I adopt the sentiments of all those who have debated before me as my own.

Sir, we have just been told that current public debt stands at 32 per cent of our gross domestic product (GDP). That is a lot of money. If I may, let me just enlighten hon. Members and the people of Zambia that the GDP is the sum of all incomes earned in a country. So, what the hon. Minister is saying is that the public debt is 32 per cent of all the incomes in this country. Let me give an idea of what the financial statements of this country would look like. In accountancy, when you prepare a financial statement, you will have what are called net assets, which are all the assets one has minus all the liabilities. Therefore, the colossal debt that we contracted has reduced our net assets. I think that Hon. Namugala mentioned that we need to look at the management of this country from a business point of view. If Zambia was a corporate body with a debt of …

Mr Speaker: Order, on the right!

Ms Imenda: … 32 per cent of its earnings, the shareholders would get concerned. If the chief financial officer went with a report with such figures to a shareholders’ meeting, the shareholders would not accept it, hence what Hon. Namugala said. They would not only question the competence of the chief financial officer, but also that of the board of directors. Obviously, they would also feel that the board has failed to give proper direction to the company. For Zambia, the board of directors is the Executive. Therefore, I want to take this opportunity to urge other hon. Members of the Executive to save their face by not blindly voting for this Motion just because the hon. Minister of Finance, who is this country’s chief financial officer, has said so. He is misleading them, and the people of Zambia, as shareholders of this country, are watching.

Hon. Opposition Members: Hear, hear!

Ms Imenda: We all must say no to this Motion.

Sir, I would like to echo the sentiments of Hon. Hamududu in stating that I respect the hon. Minister of Finance. He is an economist like me and an elder statesman. So, he also has to save his face and withdraw this Motion. We do not want young people to start throwing mud at him because, like I said, I have a lot of respect for him.

The hon. Minister needs to go back to the drawing board and come up with an acceptable amount for the increased debt ceiling. He informed us that the country’s external debt is more than US$4 billion, but did not tell us the interest rate we paying on this amount. In the absence of proper information, I take it that this US$4 billion is the principal amount we have borrowed. Therefore, if we add the interest, I am sure that the amount will increase.

Mr Speaker, if the interest on public debt keeps on increasing, we will go back to being a highly indebted poor country (HIPC), and I think that we all remember the period when the International Monetary Fund (IMF) had to come and lodge in this country at the Ministry of Finance to try and help us. It came up with the Structural Adjustment Programme (SAP) and many other programmes, but they all failed. Eventually, the international community just cancelled our debt for us to have some breathing space. I say no to sliding back to such a situation.

Mr Speaker, we have not been given information on what the extra money will be invested on if we raise the debt ceiling. Therefore, I can only speculate, and it is very dangerous when citizens are left to speculate about the affairs of their country. However, we cannot blame them if they speculate in a direction that displeases to the leadership when we have not given them information. In this case, the Government is just asking for a blank cheque without telling the people what sectors of the economy require more investment to necessitate more public borrowing. Prudence dictates that we invest money in sectors of the economy that can generate income and enable us pay back what we borrow. Again, let us look at Zambia as a corporate body. If we want to convince the shareholders, we have to come up with something that will show that we borrow to invest in income-generating projects. We should also prove that, after generating more income and paying our debt, something will remains for the shareholders, the people of Zambia. That is what the hon. Minister of Finance should be telling us.

Sir, the economic sectors of this country are agriculture, manufacturing and tourism. If you recall, it is not so long ago that the hon. Minister of Tourism and Arts was on the Floor of this House telling us that the ministry would take over the running of the Zambia Wildlife Authority (ZAWA) because of some difficulties. She tried to give us some reasons, but some of us were not convinced. ZAWA is in an economic entity, but our colleagues across want to take it back to the inefficient Civil Service. What is the meaning of that? That is very depressing.

Mr Speaker, if you recall, in my past debate on the issue of debt, I had said that I was very scared for the future of this country’s economy. My fears have been proved today. From the very little information I was able to gather from Hon. Jack Mwiimbu, part of the money the Government intends to borrow will be used to buy luxury cars. My heart bleeds at the sound of that. Currently, in Luena, there is no road at all that has been rehabilitated or constructed, but the people on your right want to buy luxury cars. How can they do such a thing at the expense of taking development to the people of Luena? It is very painful.

Sir, let me say something about the way the Executive is discriminating against rural areas in general. Some of my brothers and sisters on your right represent rural constituencies and should not just follow blindly. As the saying goes, “If you follow a blind person, you are also going to fall into a ditch”.

Hon. Opposition Members: Hear, hear!

Mr Imenda: So, hon. Members representing rural constituencies should recuse themselves.

Sir, by Zambian standards, the Great East Road was just okay before the Government scrapped off the top layer and claims that it will invest part of the money it borrow on the same road. Why do such a thing when the roads in Luena, Lundazi, Mwinilunga, Jimbe and Kamapanda are in a dire need of maintenance?

Hon. Members: Kanchibiya, Kazungula.

Mr Speaker: Order!

Ms Imenda: Just a few days ago, I was talking to Hon. Lubinda, who is not listening …

Mr Lubinda: On a point of order.

Mr Mucheleka: Iwe ikala panshi!


Mr Speaker: Hon. Members for Luena and Kabwata, resume your seats.  

Hon. Member for Luena, there is absolutely no need for that. You are tempting me to curtail your debate, which is totally unnecessary. You know very well that you cannot single out an hon. Member that way.

Please, continue.

Ms Imenda: Mr Speaker, I withdraw the statement that he was not listening. I said what I said because he was talking to someone, but I withdraw that one.

Sir, I was saying that I was talking to Hon. Lubinda because I found that Burma Road, which was already …

Mr Speaker: Let me just counsel you.

You are not supposed to address Hon. Lubinda, but the Speaker. You know better. If you want to address an issue relating to Kabwata, it is through the hon. Mr Speaker, not directly to Hon. Lubinda. I am sure that is plain.

You may continue.

Ms Imenda: Mr Speaker, I was saying that I was driving along Burma Road, …

Mr Livune: Hear, hear!

Ms Imenda: ... which is in Kabwata, an urban constituency. That is the point I want to make. They are extending a road that is already tarred.

Mr Speaker, how do you think I feel when the people of Luena, who have a share in the national cake, are left out, yet those who already have are given. Luena and many other rural constituencies do not have roads, yet the Government is extending Burma Road. That is sharing the cake in a skewed manner. That is why I asked where the borrowed money is being invested. “To those who have, more shall be added. To those who do not have, even the little they have will be taken away from them.” That is the situation we are in.

Mr Speaker, we live in a situation of austerity, which is one in which people’s living standards are reduced because of economic difficulties. Greece is an example. We are already in that situation, yet somebody wants borrow more so that we get into even more austerity and more difficult situations. Our people are already poor. This is what is happening and it is very sad. I hope the hon. Minister of Finance will hear me say that those of us from the rural areas are not happy, especially the people of Luena. Raising the K35 billion ceiling to K60 billion, which is K60 trillion in the old currency, is too radical. The proposed ceiling is more than our current Budget. The figure is as meaningless as the word ‘supercalifragilisticexpialidocious’.

Hon. Opposition Members: Umm!

Mr Speaker: What does that mean?

Ms Imenda: It is a meaningless word whose sound is already atrocious, ...


Ms Imenda: … but, when you pronounce it, you have to be precocious. That is the word.

So, this maximum borrowing of K60 billion is as meaningless as that word.

Mr Speaker, the hon. Minister is talking about a sinking fund as if that will make us feel comfortable. Many of us may not know what a sinking fund is and think that it is some fund that will drop from heaven and cover our debt. However, that is not the case. This fund will come from the same income that we are shrinking today. It is just like paying in advance because we know that we will pay this debt in the future. So, we are taking out part of our Budget and putting it aside. What does that mean to the implementation of programmes? It has the same meaning as that of our paying the debt today.

Mr Speaker, I would like to say that, until the Government reduces the size of our foreign missions, we will not make any savings. Last time, I talked about some areas where the Government make some savings and I was accused of being tribal and other things. However, until the Government also reduces the number of hon. Deputy Ministers, which I currently do not know, but might be over twenty, to something like eight, and abolishes the position of District Commissioner (DC) because they are not doing anything, but are just politicians in sheep skins who champion the cause of the Ruling Party, but are paid from Government coffers, we will not save money. I once told someone that I wanted to see whether a DC’s payslip shows that they are paid by the Patriotic Front (PF). The truth is that it says that they are paid by the Government of the Republic of Zambia (GRZ), yet they go around campaigning for the PF and getting allowances, fuel and other things. That is an unnecessary expenditure that should be abolished.

Sir, until the Government increases the Constituency Development Fund (CDF) for rural constituencies so that we can also invest and take some level of development to rural areas, …

Mr Mufalali: Hear, Hear!

Ms Imenda: … I will not support this budget, …


Ms Imenda: … or whatever it is the hon. Minister is asking us to do.


Ms Imenda: … I have even forgotten. It is very upsetting.

In other words, I join those who have debated before me in opposing this Motion. Let the hon. Minister withdraw it and go back to the drawing board to come up with something that will be meaningful and acceptable.

Mr Speaker, with those words, I do not support the Motion.

I thank you, Sir.

Mr Speaker: I now give the Floor to the second list of hon. Members in the following order: the hon. Members for Kasempa, Mbabala, Liuwa, Siavonga, Katuba, Keembe and Namwala.

Mr Pande (Kasempa): Mr Speaker, I will be very brief to avoid repetition. In short, I would like to say that, I adopt the debates of most of the hon. Members who have debated before me as my own.

Sir, we have a very big problem on our hands and it has been brought about by the Patriotic Front (PF) Government. Like one previous speaker indicated, we must look at what has caused us to go into this borrowing, which is that we bit more than what we can chew.

Sir, during the 2015 Budget debate, I was one of the people who advised the Government and the hon. Minister of Finance not to embark on new projects in 2015, but they ignored that advice because of the populist politics that the PF has embraced. The time has come for Zambian politics to move away from populism and appeasement. That is the only way we will stop talking about borrowing the way we have been. Projects were started without proper planning or management execution in place. As a result, most of the projects that were started have stalled due to a lack of resources, hence the hon. Minister’s coming back to request to borrow more. I urge the hon. Minister and the PF to be true to their name and be patriotic to this country by not engaging in further borrowing.

Mr Speaker, the by-elections in the country have taken their toll on the Treasury while the inconsistencies in policy statements did not encourage investment in this country. As a result, the economy is on a downward trend.  So, before any Zambian can support what the hon. Minister is proposing, like previous speakers have said, we need an inventory of how the previous loans have been used. Where has this money gone? What are the outcomes? What benefits have Zambians accrued from the borrowed funds? What benefits have accrued from the Eurobond?

Mr Speaker, instead of borrowing, the PF Government should encourage growth in the agricultural sector. I also urge it to open up the importation of oil to everybody. Today, the hon. Minister of Finance says that the borrowing is sustainable, but we all know that the price of copper is going down. What guarantee is there that, when the time for repayment of these loans comes, the price of copper will be high enough to enable us meet our obligations? We should be concerned and worried for our children and grandchildren because they are the ones who will be made to pay.

Mr Speaker, I agree with those who have spoken before me that the hon. Minister should be magnanimous, withdraw this Motion and come back with something that the House, as a whole, rather than only those in the Government, will agree to. In three months, the hon. Minister will present the Budget. What will we debate if he wants us to allow him to borrow up to K60 billion?

Mr Speaker, we should realise that Zambia is almost in the highly indebted poor countries (HIPC) status of past days. More importantly, we should realise that, this time around, there will be nobody to forgive us the debt that we are incurring.  

I know that, even on your right hand side, Mr Speaker, there are many reasonable hon. Members who understand the situation and agree with what has been said on your left but, because of the politics that we practice in this country, whereby you have to toe the line taken by your political party, they forego their own beliefs and reasoning.

Mr Speaker, I appeal to my colleagues on the right to realise that we are doing this for the country. Do not look at the few numbers on the left or think that we are saying this because we are in the Opposition. We have the interests of this country at heart. Even if the hon. Minister is banking on the threshold, the worry should be how we will manage to repay. Remember that there will be no forgiveness.

Mr Speaker, I had indicated that I would be very brief because most of what I needed to say has been said by so many hon. Members. So, I would like to humbly ask the hon. Minister to withdraw this Motion. I think that, deep down his heart, he agrees with what we are saying.

Mr Speaker, we will not support this Motion. So, we plead with the hon. Minister of Finance to withdraw it.

Mr Speaker, with those few remarks, I thank you.

Hon. Opposition Members: Hear, hear!

Mr Speaker: Those who will debate after the hon. Member for Kasempa, if you can, please, try to bring new dimensions to the debate. I note that we are getting to the point where the issues are being repeated.

Mr Belemu (Mbabala): Mr Speaker, allow me to join my colleagues in asking the hon. Minister of Finance to withdraw this Motion until a few things have been done.

Sir, when you keep borrowing, as a country, it simply implies that something is seriously wrong with the strategic direction of the economy. It only makes sense, therefore, for us to expect the hon. Minister of Finance to come and tell us how he is reconfiguring the economy. If something is not working, it is simply not working.

Mr Speaker, when the hon. Minister came with a similar Motion, I was under the mistaken impression that it would be the last I would hear about in the five years of the PF being in the Government. I was also under the mistaken impression that the loans would start to make sense to many people, including those in Mbabala. However, if you asked anyone in Mbabala Constituency whether they have felt or seen any benefits, the answer would be negative. They have only felt the negative effects of the debt.

Mr Speaker, when the Government decides to make public investments in roads, for example, it chooses those that are not likely to bring any economic reward to the country in the short term. However, we want to keep borrowing. We have said before that the Government has invested in the wrong areas. So, what is currently wrong is not the economy, but the political leadership of the country that is making the decisions. It would have been prudent for the Government to tell us how it wants to improve the running of the economy of the country.

Mr Speaker, there is so much excessive investment in wrong ventures, such as politics, that are not likely to bring anything. This is where the money is going. So, it is very difficult for me, as a representative of the people of Mbabala, to agree with this particular Motion because all that we have seen in the last three to four years is excessive investment in unprofitable political ventures, such as assigning District Commissioners (DCs) to campaign using public resources, damaging Government vehicles and using bad language to communities. We have also seen our farmers not being paid on time. The last time we borrowed, I assumed that the farmers in my constituency would be paid on time, but they were not. The same applies to the small transporters in the rural areas and the little things that we talk about here, such as earth dams, were not funded. We expected that there would be money for earth dams and containing animal diseases would, but none of that is happening.

Sir, you want me to sit here and say that I agree with the hon. Minister that we should borrow again? What should we borrow for? When I am asked that question, I will fail to justify why the hon. Minister of Finance must continue borrowing. There are areas that have not been tackled in this country, and the hon. Minister of Finance needs to be sincere and honest enough to tackle those areas. We have invested in so many ventures that are not likely to benefit us. Therefore, it is only correct to stop some of those ventures. The reason we castrate animals …


Mr Belemu: … is because we have assessed them and determined that they are not likely to be good for breeding purposes. I want to suggest that there are areas that the hon. Minister of Finance needs to castrate because they are not good for the growth of the economy.

Hon. Opposition Members: Hear, hear!

Mr Belemu: It is not too late for him to cut some areas of expenditure because it is not helping us to maintain them. We have been told of projects that have not added any value to our nation.

Mr Speaker, to this date, we have investors who are still mocking this country for failing to collect money from them and have been so unwise as to allow them to get money out of this country. When somebody mocked us over an asset from which we are supposed to get money, it should have driven a point to the hon. Minister of Finance and to us, as a country, that we need to do something. The levels of productivity in the country are also very low. Those are some of the areas that we should have been talking about. How do we reconfigure things so that we are able to mobilise resources internally first and foremost? How do we account for the monies that have been borrowed and spent in the past? How do we account for the many hours that people are being paid that are not adding any value to this country? It is only right, therefore, that the hon. Minister withdraws this Motion, for now, and goes to do a bit more work so that, the next time he proposes to do this, we will all, at least, have some level of comfort that something will come out of the borrowing.

Mr Speaker, when I was young, I heard about a project called Heaven-on-Earth. I was still a sinner, but I had no problems creating a place that looked like heaven on earth.  That is where we are being driven to. The hon. Minister of Finance wants to make us believe that giving him the power to borrow will make things alright tomorrow. Why is it that we are only hearing of the good old days? From the time some of us were born, the economy has been bad. We just keep hearing from our parents that there were once good days. That is why I am saying that the problem in this country is the political leadership. We keep reading in the history books that, at Independence, we were well off. Do we want our children to keep hearing about the history, which might even be erased because too many years will have past? If the people who colonised us woke up today, they would be surprised at how reckless we have been. A country that started with so much promise is now one of the poorest. Why, then, did we chase the people who were running this country better …?


Mr Belemu: … only to replace them with people who are worsening our problems.

Mr Speaker, we have no problems with projects that appear flowery, but we have problems when those projects leave us with more and more poverty. Borrowing is a problem. If a person keeps borrowing salt, mealie meal and relish from different people in the neighbourhood, you must know that there is a problem in your house, not with the neighbours. The problem is not that you will borrow more, but that there is something you are not doing right in your household. I want to suggest that the problem is what is happening in the Government, not anywhere else. Therefore, stop involving us in programmes or projects that you clearly know are within your ability to manage and change a few things.

Mr Speaker, I refuse to support the Motion that has been brought by the hon. Minister of Finance to the Floor of the House because the people of Mbabala have not seen any benefit from the previous loans. They have not even seen a simple thing like a secondary school. The schools to which our children go were built for us by the missionaries because we are good people. If we were not good, we would not have had development.


Mr Belemu: Mr Speaker, our clinics and schools were all built by the missionaries. If people who came from far away saw the need to develop Mbabala Constituency, what has happened to the people who live in this country? Must I come here and keep supporting them because they are doing whatever they want to do with the money when we do not even know what they do with it?

Mr Speaker, I refuse to support this Motion and, for now, it is only right and prudent that the hon. Minister of Finance withdraws it.

Hon. Opposition Members: Hear, hear!

Mr Belemu: I thank you, Sir.

Dr Musokotwane (Liuwa): Mr Speaker, I thank you for allowing me to debate the Motion.

Mr Speaker, I hardly ever debate issues in my previous portfolio but, obviously, when the matter becomes of paramount importance, I also have to stand up and make a contribution.

Mr Speaker, about a decade ago, this country was in serious trouble. It was heavily indebted to the tune of US$7.5 billion, and it took a lot of effort from civil society, governments and others, to lobby the international community and successfully lobby for debt cancellation. By 2011, when our colleagues came into office, the debt had reduced to US$1.5 billion. We were saved by that action from the effects of the heavy debt burden. Unfortunately, when we use some terminologies, people, especially the young, tend to take them casually. After all, when you say that the debt burden is high, no one will go to an hon. Minister’s or hon. Member of Parliament’s house and say that they should use their money to pay back because the country is heavily indebted. Therefore, we take it casually. Even here, people’s voting patterns may reflect that casual attitude because they say that no one will go to their house to ask for money to pay back the country’s debt. However, a heavy debt burden does impinge on the public. Today, we are hearing stories about the Greek Government cutting the benefits of pensioners and salaries because it must generate money to service its debt.

Here, in Zambia, Sir, we all recall what happened in the 1970s. When going to buy soap or cooking oil, people had to queue. By the way, as Hon. Namugala said, the ones who suffered a lot were women because some of them were being raped in those queues when waiting for bread. Therefore, this is a serious matter, and I do not think that we want to let our children and grandchildren suffer in the manner that we did. Therefore, it is against that background that we are told, today, that the Government wants to raise the limit of external debt from K35 billion to K60 billion. Translated in dollar terms, the limit will be something like US$4.7 billion or US$4.8 billion, which means that, as we sit here right now, as Hon. Hamududu said, we have already reached that ceiling, two years after we gave the Government extra room to borrow some more. In two years, we have reached this limit and, now, the hon. Minister wants us to increase it to K60 billion, equivalent to US$8.1 billion. This Government is more or less asking us to allow a threshold that will get us back to where we were before our debt was forgiven.

Rev. Lt. Gen. Shikapwasha: Even worse.

Dr Musokotwane: Even worse, yes. Where do we stand today? We were told by the hon. Minister that the level of debt is US$4.8 billion. This is where we are.

Mr Speaker, let us look at the arithmetic. I cannot quite remember who said it, but someone mentioned that it has been reported in the international news media, including Bloomberg, that the Government intends to sell US$2billion’s worth of extra bonds. That means we should add US$2 billion to the US$4.8 billion that we owe. Where does that take us?

Hon. Opposition Members: US$6.8 billion.

Dr Musokotwane: US$6.8 billion.  

Mr Speaker, we also know that there are some other debts that are contingent, and I have said this before. These are debts that I am almost certain we have to pay back. One of them is US$400 million penalty for grabbing the Zambia Telecommunications Company (ZAMTEL) from a Libyan company that had bought it. That debt has now risen to US$700 million. There is also the Railway Systems of Zambia (RSZ), which was also grabbed back from its buyers. When we add these debts, we will probably find that we owe US$7.5 billion, especially if the Government goes ahead and sells the US$2 billion bond. Apart from that, there are many construction companies in the road sector that we owe money, of course, in United States Dollar terms. When these companies do not do their work because they have not been paid, they face severe penalty charges. I suspect that, in the next two years, and unless the changes that our colleagues are talking about are effected, we will probably pay US$1 billion every year, not for new roads, but for penalties, and this is something that we have gone through in the past.
Mr Speaker, what I am seeing here is that, obviously, come next year, the deficits will be there because we have been failing to control them, meaning that there will be more borrowing. Without any doubt in mind, come next year, Zambia’s external debt will exceed the forgiven debt of US$7.5 billion.

Mr Speaker, this debt is getting out of control very quickly. Somebody said that the United National Independence Party (UNIP) borrowed US$7.5 billion in twenty-seven years, but this Government will take us to more than US$7.5 billion in five. As the hon. Members on this side of the House are saying, this is a non-partisan issue because it concerns all of us. When we stand in queues for soap, cooking oil or petrol, there will be no discrimination between those who belong to the Patriotic Front (PF), the Forum for Democracy and Development (FDD), United Party for National Development (UPND) or the Movement for Multi-party Democracy (MMD).  All of us will suffer. So, we might as well do the right thing now because that is what is required.

Mr Speaker, the other thing that worries me is that many of the projects that we are embarking on now are a seed for future problems in managing the finances of the country. How can you build so many universities within three to four years? The moment the universities have been completed you will require money for libraries, scholarships, salaries for lecturers and all sorts of things. Equally, the roads that we are building in such an unplanned manner will require repairs and maintenance in the next four to five years. So, the activities of the past few years will put a lot of pressure on the finances of this country in the near future. This is another reason we need to be concerned. The bells have been ringing; non-governmental organisations (NGOs) and hon. Members have been talking about this unsustainable borrowing and, in the last few weeks, the International Monetary Fund (IMF) and the World Bank (WB) have thrown away diplomatic etiquette and stated openly that this Government is running the finances of this country to the ground. When you see those diplomatic institutions coming out in such a manner, it means that the situation is getting out of control. We have read reports in the last two weeks that the credit rating agencies have downgraded Zambia. How can we ignore all that?

Mr Speaker, the Government said that it has undertaken a debt sustainability analysis and that all is well. I want to go into detail on this.

Sir, there are three aspects to a debt sustainability analysis. One is the debt compared to the gross domestic product (GDP) ratio that the hon. Minister talked about. To simplify that, it is basically that, if a person wants to borrow, his or her assets must be evaluated. The question is: How can you convert those assets into cash to be able to pay the debt? I will come back to this very shortly. The hon. Minister also said that the debt-to-export revenue is only 5 per cent. By the way, that 5 per cent is only true for now. When the debts mature in seven, eight or ten years, it will no longer be 5 per cent, but much higher. This element is a factor in debt sustainability assessment. It is a measure of how much the Government can access foreign exchange so that it can service the external debt. The third element in debt sustainability analysis is something to do with the revenues. Let me get back to the point that I made earlier. It is not the GDP that pays debt. Cash must be drawn from somewhere to pay the debt, not so?


Dr Musokotwane: Similarly, it is not foreign exchange that must pay debt because the foreign exchange, when it comes in, belongs to somebody. The Government must buy it because it is not given free of charge. To buy that foreign exchange, revenue is need. So, the question is: When the debts fall due, will the Government have sufficient revenue to service them or pay for the foreign exchange? As things stand, I have reason to doubt that.

Sir, I doubt the Government’s ability to service the debts it is contracting because, as we speak, even before the huge debts fall due, the Constituency Development Fund (CDF), which we should have received last year, was received one-and-half years after appropriation. If there is cash to service big debts, why do we not receive the CDF on time? Obviously, even now, there is no cash, unless the Government is just withholding it.

Mr Speaker, salaries for civil servants have been frozen for two years. If there was cash, why was that done? We are told that there are many projects that have stalled because there is no cash. If we are short of cash when these debts have not yet fallen due, what will happen when they do? Where will you get the cash from? Taking into account the debt-to-GDP ratio and export revenues, I doubt that things will hold together. This takes me back to the Motion on the Floor.

Sir, the hon. Minister wants us to raise the debt threshold from US$4.7 billion to US$8.1 billion, but I stand with those who have rejected this Motion for the reasons that I have given. Further, we have a limited window of opportunity to correct things. If we delay, we will have no choice, but to go to the IMF because they are the only people who will lend us money when we become bankrupt.

Mr Speaker, if you have been reading about Greece, you know that the IMF money comes with many conditionalities. It is not the wish of the Greek Government to cut pensioners’ money and salaries because it will cause political difficulties for the Government. However, when you allow yourself to reach the point where you have no choice, but to go to the IMF, you lose your negotiating room. You may recall how we quarrelled with the IMF because of their severe conditionalities.

Sir, many of us who are of a certain age may remember the so-called ‘IMF riots’. The IMF instructs you to remove some subsidies as a condition for giving you money. So, we should address this before we subject ourselves to it. By the way, by 2010, the MMD had graduated from the IMF. We did not need their money anymore because money was being managed properly. Now, we are getting to a situation where we risk going to IMF, where we will lose the right to determine our own destiny. If we are not careful, we will have IMF riots on your hands.

Mr Speaker, I agree with my colleagues who have said that it is too simplistic for the hon. Minister of Finance, who I have so much respect for, to come and simply ask for a blank cheque without addressing the fundamental factors that have led to this squeeze. Why are we keeping quiet about the fact that a lot of money is being wasted on by-elections?

Ms Namugala: Hear, hear!

Dr Musokotwane: Since the Government incited its people to go to court, why not withdraw all the cases? By the way, I am still in court, but I exclude my case from this suggestion.


Dr Musokotwane: Withdraw the cases for everyone else and save money.

Sir, in addition to Hon. Mutati’s comments, public-private partnerships (PPPs) could have saved us a lot of money. The airport for which we borrowed US$300 million could have been built under a PPP arrangement. However, this Government cancelled an agreement we had with the private sector to upgrade the airport at US$100 million without a single penny from the Zambian Government. The company we were in partnership with came from a reputable country with the fourth biggest airline in the world. So, we knew that it would market this airport to become a — What do they call them?

Hon. Opposition Members: Hub.

Dr Musokotwane: To become a hub. Now, do you have the confidence that the National Airports Corporation (NAC) can turn that airport into a hub?

Mr Speaker, people have talked about the issues of infrastructure and other things. The point is that the hon. Minister should come back and tell us what expenses he will cut. Then, we may give him a little more room to borrow. However, this simplistic approach of asking for a blank cheque when we do not know where the money will be spent will not be accepted.

I thank you, Sir.

Hon. Opposition Members: Hear, hear!

Mr Hamudulu (Siavonga): Mr Speaker, for the reasons that were advanced by the earlier debaters and the few that I will elucidate here, I do not support this Motion.

Sir, let me pick up where Hon. Mutati left off when he said that the hon. Minister of Finance is a good man. I agree that he is. However, today, he has failed to convince me that I should support the Motion that he has moved on the Floor of the House. I was looking at him while listening to his words and saw that his body language did not co-ordinate with the words that he was speaking.


Mr Hamudulu: He even failed to convince himself. I do not think that he agreed with what he was saying. One principle that I have in life is that, before you convince me, you must convince yourself.

Mr Speaker, as you said, I would like to take a different dimension in my debate. Therefore, for the reason that the hon. Minister did not convince himself, which was very evident from his body language, I will not follow him. Secondly, I will oppose the Motion because I believe that the hon. Minister had a meeting with the Cabinet in order to come up with the Motion. However, looking at the facial expressions …


Mr Hamudulu: … of those who should have been party to this decision, I am not convinced that they arrived at the right decision.

Hon. Opposition Members: Hear, hear!


Mr Hamudulu: For that reason, I will not support them. They have clearly showed here that they are not in agreement. There may be a few or one who is not here who may have bulldozed this decision because I was very attentive and there is nobody in this room who showed that they were in agreement with what the hon. Minister was proposing. For that reason, I want to move with the majority by opposing this Motion.

Mr Speaker, the other reason I oppose the Motion is that, when we pray here, we say that there are people out there whose interests have been committed …

Hon. Opposition Members: To our charge.

Mr Hamudulu: … to our charge.

Hon. Opposition Members: Hear, hear!

Mr Hamudulu: When I saw the notice of this Motion, I did not have enough time to go back to Siavonga, but I decided to move in all areas of Lusaka. I boarded minibuses, …

Mr Livune: That is right.

Mr Hamudulu: … and visited markets and hospitals to ask those whose interests have been committed to our charge ...

Hon. Opposition Members: Hear, hear!


Mr Hamudulu: … what their take was on the Motion in the House and none of them told me to come and support it.

Hon. Opposition Members: Hear, hear!

Mr Speaker, 100 per cent of the people I asked across the city of Lusaka advised me not to support this Motion. Realising that my job is to represent their interests, …


Mr Hamudulu: … I will follow their advice.

Hon. Opposition Members: Hear, hear!

Mr Hamudulu: Mr Speaker, I will not support this Motion. If a few of my colleagues on this side (left) of the House and I decide not to support this Motion, but our colleagues there (right) decide to support it, those whose interests were committed to our charge may not win the day. For that reason, I want to borrow a system that is used in some churches. After the preaching has been done, there is a time of appeal.

Hon. Opposition Members: Hear, hear!

Mr Hamudulu: Sir, I know that, when an appeal is made, some people may think that, if they convert, they will be seen to be worse sinners. That is not the case. Time is now. My appeal to those who are in support of the Motion is to search their inner souls. Colleagues, let us look at the interests of the people who brought us here. I have said here that I have spoken to a cross-section of people and they have told me not to support the Motion.

Mr Speaker, I went to Munali, Kabwata and Mandevu, and the people there told me not to support this Motion because it is not in their interest. For that reason, I appeal to those who may be thinking otherwise to take this opportunity to demonstrate to our voters that we can rise above partisan lines and consider the interest of our nation, more so, the interest of those who brought us here. Time is now because we are debating. I do not want us to actually go into voting because this is an issue on which we can reach an agreement by consensus because it is non-controversial and non-partisan. There is no pride in being debtors. The hon. Minister has told us that the lenders are praising us that we are bankable and credit-worthy. You cannot be a proud borrower.


Mr Hamudulu: Sir, that is what I was taught. There is no honour in being a debtor. The lenders want to get money from us. Do you think they will tell us that we do not know how to pay? They will praise us. So, for me, that is not a reason that can move me into supporting this Motion. Colleagues, I know that we do not debate ourselves but, even as I speak, I can see facial expressions in agreement with me that the time to repent is now.

Hon. Opposition Members: Hear, hear!

Mr Hamudulu: Mr Speaker, with those few words, I appeal that this Motion should not proceed to a vote. Let us just agree by consensus and uphold the interests of our people, which were committed to our charge.

I thank you, Sir.

Hon. Opposition Members: Hear, hear!

Mr Shakafuswa (Katuba): Mr Speaker, I commend the hon. Minister of Finance for allowing us to debate this Motion, and I say so because, if he had wanted to use the old fashion, he could have just brought a Bill to this House and it could have been bulldozed. So, I thank him because he moved a Motion so that he can gauge the feelings of the hon. Members of Parliament.  

Mr Speaker, what is the situation in the country currently? I think that the hon. Member for Liuwa captured the reality. When you Budget, you should do it within your means and make sure that it is something that you can touch by the end of the day. I think that the hon. Minister of Finance will agree with me that, every year, going by the gross domestic product (GDP), what you are able to touch is between 18 per cent and 25 per cent of the GDP. That is the line in which we usually Budget. Our last Budget was very optimistic, but we have failed to raise the revenue to fund it and that is what is necessitating our desire to borrow. We have a Budget deficit of over K20 billion.  

Mr Speaker, how has the Budget performed, so far? We were very kind and decided to put more money in the people’s pockets by raising their salaries. As a result, 60 per cent to 65 per cent of the Budget, before anything else is done, goes to salaries. When we add to that the Government’s recurrent expenditure, we are talking about spending 70 per cent to 80 per cent of the Budget. If we include in that the costs of servicing the loans that are due, we will be talking of about 85 per cent of the Budget, going to 90 per cent. How do we sustain a situation like this? The easiest way is to move a Motion like this one in the House. I am happy that the hon. Minister has done so because, through it, the nation will listen to our views.

Sir, the easiest way out of a financial squeeze is to borrow, but are we doing that in order to pay off the Eurobond and some other debts, some of which are contingent? Are we borrowing in order to take this country forward? There are countries that have gone on the credit markets, but they started by saying that they wanted to develop their country. They, then, decide on the portfolios in which to invest in that will have the maximum growth impact so that, if they put their money in those sectors, their countries generate enough revenue and be able to develop and repay their loans within, say, four years. I would be very happy if I got that idea in this House.  

Mr Speaker, one thing I have noticed in this Parliament is that we are moving away from the practice of pulling each other along just because we belong to one party or another. The language I now hear is that of moving this country forward. It is no longer for the Patriotic Front (PF) or the United Party for National Development (UPND) alone. You will sit there (right) until 2016. Therefore, you are the champions and should move this country forward. You guys are the drivers.

Mr Speaker: Order!

Withdraw the word ‘guys’.

Mr Shakafuswa: Mr Speaker, we want the hon. Members on your right …


Mr Shakafuswa: … to move this country forward with our participation because we can also feel the impact. We want you, hon. Members …


Mr Shakafuswa: If the driver does not drive well, the passengers will hold their seats because they feel the impact. So, I am grateful to the hon. Minister for giving us the opportunity to talk.

Mr Muntanga: He is not listening.    

Mr Shakafuswa: Mr Speaker, when we borrow money and we make a budget and decide to use the money on infrastructure development, but we later discover that the implementation of the Budget leaves us with a deficit of K3 billion, it means that we did not budget well and we are not doing a good job. The hon. Minister is a good man but, I think, someone needs to advise him on some issues. I worked in the Ministry of Finance and my hon. Minister would be fired in the evening and reinstated in the morning.


Mr Shakafuswa: Yes. Mr Ng’andu Magande used to be fired because there was a time when he was in Chipata …

Mr Speaker: Hon. Member for Katuba, …


Mr Speaker: … I think, it is not fair to debate individuals who are not here. I know that I have been quite liberal about these approaches to the personal element. However, let us confine ourselves to issues at hand.

Please, continue.

Mr Shakafuswa: Mr Speaker, there was a time some Cabinet Ministers and the then President visited Chipata and he directed the hon. Minister of Finance to give the Food Reserve Agency (FRA) additional money when we had budgeted K500 billion for the agency. The hon. Minister of Finance refused to do that because he had not budgeted for that money. He later called me and told me that he would be fired for saying that. So, I picked up the telephone and called the President …

Mr Speaker: You have gone back to what I am restraining you from doing.

Mr Speaker: Please, if you have exhausted your debate, …    

Mr Shakafuswa: I have not, Sir.


Mr Speaker: … indicate so.


Mr Shakafuswa: Mr Speaker, I am just referring to what Hon. Mutati said. You can be a good hon. Minister of Finance, but what matters is your reputation, as a person. After all this is done, how will the nation look back on your tenure as hon. Minister of Finance? That is what I was trying to drive at.

Sir, I know that the hon. Minister of Finance is under pressure because, after the reversal of the mining royalty tax, the Government has to look for alternative ways of generating revenue. I do not blame the hon. Minister for the reversal because there was a positive side to doing that. We have always looked at the output side of investment. Between 2006 and 2008, the overall investment was not as much as the overall investment today. So, when you look at it as a way of generating revenue, where are we going wrong? Even if we tax them at 30 per cent, they still claim that they have made losses. Further, instead of asking Zambians to help create wealth for themselves by giving them contracts, they have their own companies outside that supply them with goods and services. As a result, they over-price those goods and services. All that we see are invoices and the Zambia Revenue Authority (ZRA) has no way of verifying that the invoices are fraudulent. So, the Government can give concessions to the mining houses, but also create employment in the country by directing that only Zambian-registered companies should supply the mines with the required materials. Then, the Government can tax those companies. In the long run, that will bring the income that we lose on the other side and those guys gain through their dubious ways of operations.

Mr Speaker: Can you withdraw the word ‘guys’.

Mr Shakafuswa: Those companies that actually make profits, but cheat us out of our revenue through tax avoidance gimmicks. Studies have been undertaken at the Ministry of Finance that show which countries the companies come from and how much they are charged in those countries. You will be amazed that to discover that, in the Scandinavian countries, they charge up to 65 per cent tax on mineral and gas exploration but, when they come here, they do not want to pay. We cannot allow that kind of situation. We have to ensure that those people commit themselves to paying our fair share of our resources that they exploit.

Mr Speaker, how do we spend the resources we borrow? Hon. Mutati stated that the Chinese spend about US$350,000 to construct a kilometre of road while we spend about US$1.5 million on a similar project. Where has this sudden jump come from when the Dollar has been stable?  Hon. Minister, there is someone who is benefitting from this and you have instruments within your means to stop such people. We used those instruments when I worked under your office. There are bills of quantities (BoQs). So, the people who want to work on the roads even know the cost of the works. If you went to the Road Development Agency (RDA), they would show you what BoQs are and you will discover that the Government spent US$30 million on some roads that actually cost US$10 million. That is wasteful, and it is where this problem comes from.

Sir, this House passed the Anti-Money Laundering Bill. At one time, we went to the Drug Enforcement Commission (DEC) because we suspected there was something fishy there. Some people from the RDA and those who were given contracts to work on the roads were arrested. Most of them opted to settle out of court and stated the actual cost of the projects. Therefore, in 2007, we saved the State K900 billion. From then, when we gave the spending agencies money, they were scared to use it because, then, there was a Department of Planning. We were concerned, as a Government, that the money that was spent on some projects was more than what was budgeted for. For example, when we budgeted for the construction of a classroom block, the money would be finished, yet the classroom would be at the window level. So, we decided to have people that would monitor how money was spent so that those who misused public money were arrested. I recommend that you resuscitate the Department of Planning so that you will be able to monitor the execution of the Budget. Sometimes, the disbursed money does not go towards the intended projects, but rather into the pockets of people who, at the end of the day, still want a salary. So, why are you paying them a salary when they pocket the money and make you perform badly?

 Mr Speaker, I suggest that we look at the execution of the Budget. Let us see where the loopholes are. This House has given the Executive powers to seal the loopholes using statutory instruments. Money laundering does not just involve drugs, but also the illegal acquisition of money. In most cases, those who acquire money illegally do not even pay tax. Therefore, they should be jailed. Those instruments are at the disposal of the Executive.

Sir, the interest rate on the Eurobond is between 6 and 8 per cent. In Europe, today, the interest rate is around 2 to 3 per cent. Why should we resort to an instrument that is very expensive? The interest rates for the Exim Bank of China are between 2 and 3 per cent. Why are we are going for an expensive loan? These are the issues that the people here are concerned about. So, what we are saying is that, before we give you a blank cheque to borrow, you should tell us why you want to go for that loan. In any case, we are just helping you because this so-called threshold is not good for the country.

Sir, I do not foresee a situation in which our productivity will increase exponentially high to meet the obligation of paying our debts. You are, therefore, transferring these debts to our children. Why can we not get a loan or loans that we can repay within our life time and do something whose impact we would feel within the life of this Parliament? Let us plan for the next five years and see what we are able to do. I would be happier if we could spend money on guaranteeing our food security. We allow our water resources to just flow to the ocean all the time. Why not use some of the loans to build dams in areas where there is potential for people to cultivate crops throughout the year so that we do not have to worry about food security? We can borrow money to increase agricultural productivity so that we sustain ourselves, as a country? I am sure everyone will agree with that idea. Why can we not borrow money so that we help those guys who live near rivers to improve their livelihoods …

Mr Speaker: Can the hon. Member on the Floor withdraw the word ‘guys’.


Mr Shakafuswa: Sir, I was born and bred on the streets of Lusaka. I beg your pardon and withdraw the word.

Sir, why can we not look for money to plough into areas that will spur economic growth? Thereafter, we will be able to get revenues from the same sectors through tax and sustain ourselves because business will be enhanced.

 Mr Speaker, there is nothing wrong with borrowing if you are borrowing for a good reason. The problem is when you borrow for a prestige projects like road construction. Very soon, the newly-constructed roads in the compounds will be forgotten by the people because poverty will creep in. if anything, people forget very quickly. You have spent so much money to gain political capital in just one term. You should know that people will move on as poverty starts creeping in and they will forget who helped them eat yesterday. Thereafter, you will find yourselves under pressure, as a Government and you might want to do some good to appease the people, but it might not be enough. So, as a nation and as hon. Members, we are not against the PF Government because it is the Government in power and has been given the mandate to rule this country. Equally, we will not sit here and see the country go to the ujeni.


Mr Speaker: Where?

Mr Shakafuswa: Sir, we will not sit in this House and see the country go the dogs.

Mr Speaker: That is also unacceptable.

Mr Shakafuswa: Mr Speaker, we will not sit here and see the country’s situation get worse. We would rather work together and lift this country high so that, one day, people will say, “There were men and women in that august House who thought of us and lifted our livelihoods.”

 I thank you, Mr Speaker.

 Hon. Opposition Members: Hear, hear!

 Rev. Lt-Gen. Shikapwasha (Keembe):  Mr Speaker, I thank you for giving me the opportunity to debate this Motion.

Sir, from the start of my debate, I ask the hon. Minister of Finance to withdraw this Motion. I was the hon. Minister of Foreign Affairs when Zambia was lobbying the world to cancel its debt. In the two-and-half years I was in that portfolio, I spend nine months flying all over the world to lobby for the debt to be cancelled. Therefore, it was painful for me to be reminded of those days.

Sir, we went and we negotiated with many nations that belittled us because of the condition in which we were and our failure to sustain our economy despite being rich in copper and other minerals, such as emeralds, that some people who came here poor have been able to exploit and build hotels in Canada and Europe. Therefore, I think that the hon. Minister of Finance has other avenues for revenue mobilisation rather than just thinking about borrowing such huge sums of money. The resources he is looking for can be mobilised internally.

Mr Speaker, I completely agree with Hon. Dr Musokotwane and many others who have debated before me. Mind you, Hon. Dr Musokotwane and many other hon. Members in this House sat down to see how best we could resolve the nation’s economic problems when the Movement for Multi-party Development (MMM) was in power. We left behind a robust economy and foreign reserves. I, therefore, ask what has happened to our economy, hon. Minister. I have respected you greatly over the many years of our association, but I want to tell you that, today, I am not in support of your Motion because the situation into which you want us to go will never solve our problems.

Mr Speaker, you asked for a new dimension to our debate. So, I will introduce one by appealing to hon. Members of Parliament, hon. Deputy Ministers and hon. Ministers on your right that this Motion does not move Zambia forward. The House may wish to know that, being a Reverend, I have been praying for my country and my President and, on 1st June, 2015, God spoke to me, and I want to share with this House what God said to me.

 Hon. Members: Hear, hear! Alleluia!

Rev. Lt-Gen. Shikapwasha: Mr Speaker, God told me to include Zambia in my prayers because it is drifting away from the Kingdom of God.


 Mr Speaker: Order!

Rev. Lt-Gen. Shikapwasha: The Lord said to me that there were …

Hon. Government Member: Go and borrow.

Rev. Lt-Gen. Shikapwasha: No, He did not tell me to go and borrow.


Mr Speaker: Continue, hon. Member for Keembe.

Rev. Lt-Gen. Shikapwasha: Sir, the Lord told me that no one was speaking against the evil in the Government and that I was to pray for the truth to prevail in Government. He said that He had many saints in the Government who were not speaking against evil because they were afraid of losing their jobs.

Mr Muntanga: It is true.


Rev. Lt-Gen. Shikapwasha: Mr Speaker, I ask everyone in this House if this level of borrowing will help Zambia. Even as you are seated on the Government side, God sees in your hearts. So, will you allow the Motion to pass just because you are afraid of losing your job when God can give you another one?

 Mr Speaker, I thank you.

 Hon. Members: Hear, hear!

Mr Speaker: I will give the Floor to the last debater on the left, the hon. Member for Namwala, before it open the Floor to the right.

Ms Lubezhi (Namwala): Mr Speaker, I thank you for this opportunity to debate the Motion.

Sir, time and again, you have counselled that we are hon. Members of Parliament who must behave in a manner befitting our status.

Mr Speaker, the Motion the hon. Minister of Finance has moved in this House is a financial scandal.

Mr Speaker: Hon. Members, let us guard our approach.

Mr Speaker: Order!

Business was suspended from 1815 House until 1830 hours.

[MR SPEAKER in the Chair]

Ms Lubezhi: Mr Speaker, before business was suspended, I was in the process of saying that this Motion is a financial disaster and a tragedy to our country. How else can you explain the situation in which the Patriotic Front (PF) Government is trying to put us? I am not in support of the Motion because I do not want to be part of a financial tragedy. When the United Party for National Development (UPND) forms Government next year, heads will roll.

Hon. UPND Members: Hear, hear!

Ms Lubezhi: Mr Speaker, I want to echo the words of Hon. Hamududu, who said that it is unlawful to utilise funds that are not allocated in the Budget. That is why I am saying that it is a financial tragedy, and that, when we take over power next year, heads will roll.

Mr Muntanga: We will arrest them.

Ms Lubezhi: Mr Speaker, Hon. Namugala said that she doubted the intellectual capacity of those who govern this country.

Mr Speaker: Hon. Member for Namwala, resume your seat.

Ms Lubezhi resumed her seat.

Mr Speaker: I am concerned, very concerned in fact, about the manner in which you wish to proceed. You have heard how interesting, factual and objective the debates have been. So, I would have imagined that we would continue with that trend. You see, this is a battle of ideas. So, let us be objective. This is a very complex and important national issue that we must not personalise or trivialise. This is where we spend so much time.

You may continue.

Ms Lubezhi: Mr Speaker, when the hon. Minister of Finance brought the Budget to this House last year, in a copper suitcase, …


Ms Lubezhi: … some of us described it as the worst that this country had ever had. Today, this Motion is an acknowledgement of that assessment. If that Budget had not failed, we would not be debating this Motion today.


Ms Lubezhi: Those of us with foresight told those ones on your right…


Ms Lubezhi: … that they had brought a faulty Budget. The only time the revenue and expenditure of the national Budget are at equilibrium is when the hon. Minister of Finance brings the Budget Speech here in the copper suitcase.


Ms Lubezhi: Immediately he walks out of here, there is a Budget deficit, which currently stands at K20 billion. Honestly, how can we have a deficit equivalent to half the Budget? That is why I am saying that this is a financial tragedy. How can the hon. Minister of Finance allow a financing gap of K20 billion in the Budget? That shows lack of foresight.

Mr Livune: On whose part?

Ms Lubezhi: Mr Speaker, I will declare interest, since I am privileged to sit on the Committee on Delegated Legislation.

Sir, the hon. Minister of Finance waived excise duty on clear beer just to benefit one company. Is clear beer not a luxury?

Hon. Member: Ma Jameson.

Mr Livune: Which clear beer?

Ms Lubezhi: Clear beer brewed from cassava. This deprived the nation of revenue from that one company.

Sir, all the hon. Members who have debated, so far, have said that the hon. Minister of Finance should probably just withdraw this Motion. I feel, however, that he must actually resign because he has failed this nation.

Hon. Opposition Members: Hear, hear!

Ms Lubezhi: Mr Speaker, the performance of the economy is a very good tool for measuring the governance capabilities of the people and party in power. Currently, the Kwacha is in free-fall, which entails diminishing returns on the popularity of the Patriotic Front (PF) among the electorate.

Mr Speaker, I thought that, when the PF Government removed fuel subsidies and imposed a two-year wage freeze, we would save some money. Looking at the current situation, one can only imagine the state in which this country would have been if we did not have that wage freeze.


Mr Speaker: Order!

Ms Lubezhi: The hon. Minister of Finance would, probably, be asking to increase the debt ceiling to K100 billion, instead of the K60 billion for which he is asking because, despite removing the subsidies and imposing a wage freeze, he is asking for a threshold of K60 billion. As most of the colleagues on your left have debated, he has not even told us why he wants the ceiling to be raised. However, it requires simple arithmetic to demonstrate that K60 billion is approximately the sum of the K20 billion Budget deficit and the current debt ceiling of K35 billion, which is K55 billion. So, the hon. Minister has pegged the increase to K60 billion to cover money that has already been used through the K20 billion Budget deficit.

Sir, we would have been smiling if the Budget deficit came with completed works on all our roads under construction. Alas, the opposite is true.  For example, less than 500 m has been worked on since 2011 on the Monze/Niko Road. I do not know if the Paul Mushindo University has been completed.


Hon. Member: Robert Makasa.

Ms Lubezhi: Mr Speaker, I do not know who misled the PF that the construction of infrastructure equals actual development. The truth is that development must reach the people and alleviate their poverty. When I was coming from the airport this afternoon, I found potholes on the Great East Road, yet the Government is constructing some roads with no economic value. If the stretch from the Great East Road to the airport cannot be worked on, one wonders which roads our colleagues in the Executive are working on. We debated the Ndola/Kitwe Dual-Carriage Way and tried to discourage them from working on it because it was a solid road constructed by Phoenix Contractors in 1991. However, these people went and dug it up. Go on that road today and see what is happening. For some of us who are always on it, we can see that a shoddy work is being done on the road. However, if we say that you people put more money into Road Development Agency (RDA) because of kickbacks, you deny it. That is the reason I am saying, next year, when we come into power, heads will roll.

Hon. UPND Members: Hear, hear!

Ms Lubezhi: Sir, I hope that hon. Minister of Finance will tell us whether the RDA is still at State House when he rises to respond to this debate. I say this because I know it was at State House. That institution got more money in the Budget than some ministries. In the 2015 Budget, the RDA got more money than the whole Ministry of Health.


Mr Speaker: Order!

There are too many conversations going on.

Mr Mwila: Mucheleka.

Mr Speaker: To those who want to engage in conversations, the doors are wide open.

Continue, on. Member for Namwala.

Ms Lubezhi: Mr Speaker, I was saying that one wonders why the RDA, which is just a department under the Ministry of Transport, Works, Supply and Communications, is allocated more money than the Ministry of Health, the Ministry of Community Development, Mother and Child Health, and the Ministry of Chief and Traditional Affairs, granted, the Ministry of Chiefs and Traditional Affairs is more like a department, too. How can the Executive explain such a situation? It is because it gives contracts to PF cadres who, in the end, do shoddy works. Then, the hon. Minister of Finance comes here and tells us that he wants to increase the debt threshold.

Mr Speaker, I even get more worried when the hon. Minister does not even show any sign that, at some point, we will stop borrowing under the PF Government. He is telling us that, after all, we have not reached the 40 per cent international debt threshold. Can you imagine that? Who says we want to reach the 40 per cent international threshold?

Ms Lubezhi: This is Zambia

Mr Livune: Hear, hear!

Ms Lubezhi: Can you imagine, their policy is to borrow to the maximum! He lamented that local interest rates are too high. So, the Government cannot borrow from the domestic market. Why are the local interest rates so high? Is it not because the Government has over-borrowed to finance the unbudgeted-for expenditure? Let us talk about the induced by elections. Like Hon. Mweetwa put it, they would nullify a seat as if the holder’s party is the one that is corrupt when it is an individual who is, then, the following day, the same corrupt individual is adopted by the Ruling Party, wins the elections and join the right. Is it not a mockery? Is it not a waste of resources? We could have done better than that. We should have saved money.

Mr Speaker, when you talk about the debt burden, as at 2010, the debt-to-gross domestic product (GDP) ratio was at 10 per cent but, by 2014, it was 31.1 per cent. That is why I am saying that this Motion, even if you told me to withdraw that, is a financial budget.

Mr Speaker: Hon. Member, resume your seat. I have curtailed your debate.

Hon. Government Members: Hear, hear!

Mr Speaker: We will now proceed to the right.

The Deputy Minister for Eastern Province (Mr Sichone): Mr Speaker, thank you for the chance to add a word to the debate on the Motion on the Floor of the House.

Mr Speaker, I must say that I am in support of this Motion …

Hon. Government Members: Hear, hear!

Mr Sichone: … because of the reasons I will advance hereafter.

Mr Speaker, this Motion is not about the hon. Minister of Finance, but about the future of this country. We need to realise that, when the Patriotic Front (PF) Government came into office, we had to revise the Sixth National Development Plan (SNDP). Further, every plan has a cost. There is a time in every planning cycle when you have to mobilise resources. The Revised Sixth National Development Plan (R-SNDP) requires funds for it to be operationalised and the resources have to come from somewhere. In any case, everybody agreed that the SNDP was one of the best plans. It followed the Fifth National Development Plan (FNDP).

Mr Speaker, I get surprised to see people rise on the Floor of the House to debate against a Motion that talks about improving the livelihoods of people in the villages in the very remote areas from which they come.


Mr Sichone: Mr Speaker, we might think that K60 billion is a lot of money but, if we are to remain committed to taking care of, and providing the support that our people require through guidance and leadership, this is very little money to change the lives and livelihoods of our people.

Hon. Government Members: Hear, hear!

Mr Sichone: Mr Speaker, are we forgetting that this country has poverty levels of up to 60 per cent? In fact, we have tried to lower that in the recent past. As recent as 2004, it was as high as 72 per cent. The poverty levels were that high when the gross domestic product (GDP) was growing at a very positive rate.

Mr Speaker, let us not be theoretical as we debate. This country requires us to take a bold decision today.

Hon. Government Members: Hear, hear!

Mr Sichone: It is a day for all of us who have been crying for roads, bridges, hospitals and schools. Sir, in some cases, we have areas where our children have never known that learning must take place in a classroom. They have never known that there are black boards or computers. So, we need to drive this economy and grow it.

Mr Speaker, the current economy is very small, and we must be worried, as leaders, that even countries as small in population as Botswana have bigger economies than ours. We must be worried that Malawi has a bigger economy than ours.


Mr Sichone: We must be worried that, even when we are recording positive growth rates, …


Mr Speaker: Order!

Hon. Members, there are established conventions for disagreeing with the sentiments of the hon. Minister on the Floor. Follow those conventions because, when you break into a general, murmur and try to drown him, it will not do. For most of the time that the left was debating, the right was listening in silence. That is how it is supposed to be. You are not compelled to agree with anyone. This is a debate. I made a plea earlier that we debate in silence. You may not agree with him, but you cannot shut him down equally. I will certainly not permit it. It does not matter what views he is expressing. Whether you like them or not is not the issue. The issue is that he has the freedom to express himself like you do. These are simple rules.

Continue, hon. Deputy Minister.

Mr Sichone: Mr Speaker, thank you for your protection.

Mr Speaker, it is quite worrying, and it has never been gratifying to be a leader in this country, as someone put it, because of so much talk that goes around even when we are faced with very real situations like the one we are talking about. Today’s Motion will determine the future of the economy in this country.

Mr Speaker, small as our economy is, we want to stretch it to obtain benefits that we can only get from an economy as big as, maybe, that of South Africa. It is not possible to do that. When business was suspended, one of my colleagues was saying that we needed roads, a school and a bridge in some place and I said that, if we needed those things, then, we needed to finance them. However, where will we get the money? The collections we make from the mines and small traditional enterprises in the country cannot provide the resources needed to develop this nation.

Mr Speaker, poverty is another thing. If we are to eradicate poverty, we need to invest. There are no two ways about it. We need to make capital investments. Now, the question that I have is: Where will we get those resources? Who will provide them? The size of our economy cannot support that kind of investment. So, we definitely have to borrow so that our economy will start to grow. The only challenge that we have is an element of mistrust, especially from the other side of the House. However, there should be no mistrust because the current hon. Minister of Finance was the hon. Minister of Finance when the schools and roads that we are rehabilitating were constructed. Between then and today, this country went silent on infrastructure development, yet …

Hon. Government Members: Yes!

Mr Sichone: … we will not deliver anything or change anyone’s life without infrastructure development.

Hon. Government Members: Hear, hear!

Mr Sichone: Mr Speaker, our approach is to alleviate poverty among our people, and the same poverty that I am talking about has been exacerbated  to this level because, at some point, some people failed to make bold decisions like the one that will be made by this House today.

Hon. Government Members: Hear, hear!

Mr Sichone: Mr Speaker, I must put one issue into perspective. Let us look at the size of the debt burdens of some other African countries. Let me start with South Africa. People are saying that South Africans come here to invest malls and hotels. The question is: Where do they get their money from? They have grown their economy to the extent that even private individuals or institutions have the capacity to come across the borders and invest in this country. Can we not do the same by growing this economy? Will we continue to sing about the growth of the economy in gross domestic product (GDP) terms without reflecting on the transformation that is expected in the lives of our people? South Africans come here to invest because they have money, which is borrowed money.

Hon. Government Members: Hear, hear!

Mr Sichone:  Mr Speaker, let me quickly point out that, by 2013 or 2014, South Africa had borrowed US$139 billion, and part of that money has not ended in South Africa, but has come here to Zambia. So, will we sit and do nothing except sweet-talking South Africans to come and invest in our economy? Can we not borrow money and invest it ourselves? Can we not do that to encourage the local people to invest? If we bring money in the country, we will definitely get to a point where our competitiveness in terms of our participation on the credit markets will be enhanced.  

Mr Speaker, in 2012, South Africa borrowed US$130 billion and, a year later, increased the amount to US$139 billion. That tells us that US$9 billion, in a year, moved from some source into that country to enhance the development that we admire today.

Mr Speaker, let me also refer to Tanzania, a country that borders Muchinga Province. We are all very familiar with this country because of the relations that exist between us.

Sir, by 31st December, 2012, Tanzania had borrowed US$11.8 billion. When you go to Dar-es-Salaam today, you will find that it is a construction site. Where did the money for those projects come from? Will we use magic to generate resources for us to invest in this country and grow our economy?


Mr Sichone: It is not possible. Even if we sold all our castrated cattle, …


Mr Sichone: … there is no way we could grow this country’s economy.

Hon. Government Members: Hear, hear! Bwekeshapo.

Mr Sichone: Mr Speaker, Tanzania did not end there. In one year, it had increased its debt from US$11.8 billion to US$13.8 billion, which was an increase of about US$3 billion. Surely, can we not see that Tanzania is developing faster than we are?

Mr Speaker, Kenya has borrowed to the tune of US$12.7 billion. What is our external debt? About US$4 billion. Are we sure that we will match with these countries whose economies have accommodated all these huge amounts of monies? If we continue with the talking that has existed in Zambia for too long, we will not go anywhere. We have invested too much in talking and misleading those who do not have access to information. That is very dangerous because poverty will escalate and, when that happens, it does not matter what political stance we take, the reality will remain that poverty will have escalated.

Sir, this Motion is, to me, non-controversial.

Hon. Government Members: Hear, hear!

Mr Sichone: The hon. Minister of Finance did not do this with bad intentions. I have one question on the road infrastructure development. Phases I and II of the Link Zambia 8000 Project require more than US$3 billion to be realised. Are we interested in these roads?

Mrs Lubezhi: No!

Mr Sichone: Are we interested in uplifting the livelihoods of our people? Are we interested in investing in the Nitrogen Chemicals of Zambia (NCZ) in Kafue? Are we interested in providing our farmers with market centre where they can sell their meat?

Hon. Government Members: Hear, hear!

Mr Sichone: Are we interested in providing an expanded agricultural system by investing in mechanisation?

Hon. Government Members: Hear, hear!

Mr Sichone: If we are, where will we get the money from? Should we continue pulling oxen?


Mr Sichone: Mr Speaker, may I declare interest. I come from a region where we keep cattle and I understand oxen.  


Mr Sichone: Mr Speaker, the investors we are attracting from the United Kingdom come from a region that has borrowed over US$146 billion in a very short period of time and has a debt of over €1 trillion, in case you do not know.

Hon. Government Member: They do not know that.

Mr Sichone: Germany, alone, has a debt of about €1.9 trillion, and those are the people we are begging to come and invest in country. So, why can we not borrow and invest, ourselves?

Sir, I know that, most of the time, we look at these issues from a certain perspective, and we have heard people say that we have been heavily indebted before, to which I agree. Who does not know that our economy had collapsed because of the sanctions that had been imposed on the United National Independence Party (UNIP) Government? Even my daughter knows about that because she is learning about it in school.

Hon. Government Members: Hear, hear!

Mr Sichone: It was because of sanctions that we got to where we were. I think that, in terms of fiscal prudence, we were better then than we now are.

Sir, what I am trying to say is that, in order for us to move forward, we need to find the resources we need to finance the R-SNDP and the Link Zambia 8000 Project, which will change the lives of our grandchildren.

Mr Speaker, when I was growing up, I was told that the few bituminous roads that existed in this country had been constructed under difficult circumstances in the 1980s. We should expand them as the population has grown. Our people need water. Who will provide the resources for us to put up …

Hon. Government Member: Monze/Niko.

Mr Sichone: … Monze/Niko Road?

Sir, the Bottom Road had pervaded the business of this House for a long time. Why are we quiet now? It is because we borrowed funds and upgraded that road.

Hon. Government Members: Hear, hear!

Mr Sichone: Why are we not thanking the hon. Minister of Finance and the Government of His Excellency President Edgar Chagwa Lungu?

Mr Livune: Question!

Hon. Government Members: Hear, hear!

Mr Sichone: We have a vision. The only challenge we have is that spectators feel that we are not supposed to develop this country so that, when God answers their prayers fifty years from now, they can come into power and build the roads that they do not want us to build. However, that will not work.

Sir, we will go forward with our intention to borrow and we will invest the money. In return, it will pay back much more than we got. However, I think, today’s debate is based on the ceiling, not the principle of borrowing. You may be surprised that we may only borrow a bit and, in ten years, the ceiling will remain the same.

Hon. Opposition Member: Aah!

Mr Sichone: Mr Speaker, we need support from all well-meaning Zambians.

Hon. Opposition Member: Question!

Mr Sichone: Let us not mislead our people. The teachers who teach in grass-thatched classrooms are Zambians and they are not happy. The pupils sit outside under mango trees in the cold and they require better classrooms. Can we not take the step to ensure that they are provided for?

Sir, we are borrowing because 65 per cent of whatever we are collecting goes towards personal emoluments. We need the services of Government workers. However, the bottleneck we have is that the economy is small. Can we not grow it? Even the South African economy was grown by people who made bold decisions.

Hon. Government Members: Yes.

Mr Sichone: Mr Speaker, whoever does not want a road, a classroom, investment in the NCZ, the capitalisation of Mulungushi Textiles or for us to create more factories to process our cotton will oppose this Motion.


Mr Sichone: Let the enemies of the majority, …

Hon. Opposition Members: Aah!

Hon. Government Members: Yes!

Mr Sichone: … the enemies of the children who will be born and find that we only have one University Teaching Hospital (UTH) vote against this Motion.

Hon. Government Members: Hear, hear!

Mr Speaker, this threshold must be increased and the Ministry of Finance supported. The Government of President Edgar Chagwa Lungu must also be supported because it means well and this good will has not existed in a long time.

Mr Speaker, I thank you.

Hon. Government Members: Hear, hear!

The Deputy Minister of Finance (Mr Mvunga): Mr Speaker, to start with, I wish to state that I have observed with keen interest all the debates of our colleagues.

Sir, I think that the first key question that we should ask is ourselves here is: What is this …


Mr Speaker: Order!

Mr Mvunga: … Motion that the hon. Minister of Finance has moved all about? As well articulated by my friend, the Motion is about increasing the debt ceiling from K35 billion to K60 billion. However, we have not even pegged a foot on the ground to say what the actual amount that will be borrowed is. The hon. Minister has moved the Motion to raise the debt ceiling from K35 billion to K60 billion, and I think, that is what the debate is centred on.

Mr Speaker, as a pre-emptive move, the hon. Minister indicated, when moving the Motion, that the debt ceiling is sustainable. The reason behind that is to assure the House that we are not going into a scenario in which we will put the country in a debt trap and compromise future repayments or the sustainability of the economy. This is the assurance that we are trying to give the House. This is a well-thought-through process. We understand the implications of what we propose to do. We also understand that there are commitments regarding future repayments. We have we thought through everything and the debt level is sustainable in the short term and long term, as assured by the hon. Minister of Finance.

Sir, secondly, …

Mr Nkombo: On a point of order, Mr Speaker.

Mr Speaker: I indicated earlier that I will not allow any points of order.


Mr Mvunga: … the reason we referred to the international benchmark of 40 per cent is that we want you to understand that, when measuring the progressive development of our economy, we need to do in comparison with what is happening worldwide. We should use global standards. In the absence of a measurement, it is like driving a car and looking in the rear-view mirror. You will end up crashing. You need to know the speed at which you are growing, whether that success is sustainable and whether it is happening elsewhere.

Mr Speaker, one hon. Member asked why we referred to the 40 per cent? We are just giving indicative international benchmarks of what a productive and growing economy can do at those levels of debt sustainability. I think, that should be made absolutely clear. We may or may not borrow up to 40 per cent depending on the agenda that we are driving. I think, key to understanding why we are asking for this understanding where we want to take the country. Will Zambia remain a stagnated State? Are the revenues generated locally sufficient to grow the gross domestic product (GDP) of the country? We may talk about 5.8 per cent GDP growth, but it does not make sense for the Government not to push the limits and try to grow this economy by as much as 10 per cent of the GDP. To get those levels of growth, we need to have some form of shock treatment.

In terms of the public-private partnerships (PPP) that have been mentioned, how do you facilitate them if you do not create a conducive environment for private sector investment? In which areas do you contribute? You have to invest in infrastructure development, which are your roads, information and communications technology (ICT) and energy sector. That is how you grow the economy.

Sir, the size of Zambia’s economy is not the same as it was in 1964. The demand for energy is now much higher than it was then. To keep up the pace, we need to invest in infrastructure. So, unless you want to remain a stagnated economy, you will not oppose this Motion and keep economic growth at 5.8 per cent in perpetuity. Is that justice for our future generations? It is not because their needs are increasing. We need to invest now for our children to reap the benefits of a working economy, an economy with the right infrastructure.

Sir, I just thought that it was important to clarify why we are doing what we are doing. We are not doing it for fun, but rather because it is absolutely critical, in the long term, for the country’s development.

Sir, there are other things we need to take into account as we debate this Motion. We are not an island, but part of an international market. So, we need to be cognisant of what is happening elsewhere in the world that is impacting our economy as well. We are a commodity-dependent economy and, as far as I can remember, we have talked about transforming the economy since 1964 because we have been dependent on commodities, mostly copper. In order to structurally transformation this economy, we need to start re-investing in other areas, such as agriculture, energy and in the local manufacturing of strategic products like fertilisers. In turn, that will grow our productive base and create the much-needed jobs for the economy. So, we need to understand that factors outside Zambia, such as a fall in copper prices, will affect us.

Sir, when the Movement for Multi-party Democracy (MMD) was in power, the country benefitted from the world economic growth in which copper prices shot up. So, the party ruled at the right time and had a lot of leverage compared to our current scenario in which there is a reversal in the world economic trend. This Government is responsible enough to take that into account and realise that, if we do not borrow to sustain the economy, we will put it in reverse gear. I think that it is critical that we understand those factors and that the Government is alive to the fact that we must grow this economy and invest in the infrastructure. Only then can we talk about increasing our GDP, creating jobs, reducing poverty and all the things that come with a growing economy.

Mr Speaker, I think that the issue of foreign versus local borrowing is a basic banking concept. If I recall, at some point in Zambia, Treasury Bills had hit a rate of 107 per cent or over, and we had what was called armchair banking, whereby the financial institutions stopped investing in the productive sector of the economy and invested in Government securities because they had very lucrative returns. If we are not careful and start borrowing on the local credit market, like the hon. Minister explained, we will push up the cost of borrowing and crowd out the private sector, the consequence of which will be that even the financial institutions that are supposed to extend credit to the PPPs we are promoting will move away from that and go into Government securities, thereby risking contracting the economy as opposed to expanding it. So, the rationale for borrowing from foreign markets has been clearly articulated.

Hon. Government Members: Hear, hear!

Mr Mvunga: Let us should understand why we have taken that logic. I have heard some alternative suggestions, which may be smart, but are risky, in my view. So, let us look at what we are driving with sober and objective minds as opposed to being sentimental and emotional.

Hon. Government Members: Hammer, hammer!

Mr Mvunga: Mr Speaker, the other thing that I think we, at the Ministry of Finance, need to mention is that we are very much alive to the fact that, in order to have a sustainable economy, we need to have high levels of fiscal discipline. I hope the hon. Members of this House understand this because, in all the debates that I have listened to, the hon. Members of Parliament want clinics, new  roads, health posts, schools and universities in their constituencies.

Hon. Government Members: Hear, hear!

Mr Mvunga: What they forget is that the Government does not have inexhaustible resources to fund those wish-lists that are forwarded. So, we have to be realistic and accept that we will re-prioritise, as part of the fiscal discipline, and this House and its hon. Members should accept that some of their projects will not be funded …

Hon. Opposition Members: Hear, hear!

Mr Mvunga: … as a result of our having limited resources. So, hon. Members need to be fair to the Government. Since they are asking it to implement fiscal discipline, which we will do, accept that there will be consequences. So, let us not come back on the Floor and say that the Government is not funding this …

Mr Speaker: Order!

Hon. Government Members: Hear, hear!


The Minister of Justice and Acting Leader of Government Business (Dr Simbyakula): Sir, I beg to move that the House do now adjourn.

Question put and agreed to.


The House adjourned at 1915 hours until 1430 hours on Thursday, 25th June, 2015.