By Nyalubinge Ngwende
In May this year the ruling Patriotic Front
in Zambia decided to remove subsidies on fuel and maize grain and rolled
backwards the same incentives on farming inputs.
And when government woke up without any
warning to remove subsidies on fuel and maize grain, and later reduced similar
incentives on farm inputs, it offloaded to the media statements riddled with huge
figures of money that it purported it would save and direct to financing
infrastructure development.
On Wednesday, May 15, 2013, Mr Michael
Chilufya Sata, President of the Republic of Zambia, assured Zambians that the
PF government was taking bold steps to facilitate practical and equitable
distribution of national resources amongst the general populace.
“Our people have to
understand that maize subsidies have been a pillar for the huge economic
inequality in our society as they only benefit the already well to do middlemen
and not the targeted vulnerable groups of our society. We are simply channelling
resources to the very poor citizens of our society and we are certain that for
real economic and well distributed growth to occur, these changes are
necessary. Therefore, all well-meaning Zambians need to look at days beyond
today and tomorrow,” he said.
And according to justice minister Wynter
Kabimba, in 2012, the government spent about K750 million on fuel subsidy and
the estimated cost in 2013 would have been in excess of K1,100 million.
Kabimba said, after removing subsidies
government was going to make a saving of K2.3 trillion annually and that the
money would be invested in major sectors to trigger development.
He arrogantly insisted that government will
not bow to pressure to remove the subsidies on both fuel and maize.
According to the ministry of finance,
government was to gain over K300 million every month from the removal of
subsidies on fuel alone, money that was to be used in driving the nation to
economic reliance.
Did the government tell the truth about
removing subsidies to save money and use it to develop infrastructure like
roads? It looks a VERY BIG LIE
following the facts that have emerged about gross fiscal indiscipline on part
of the Patriotic government, immediately after taking office and leading to
increased international and domestic debt.
At the time Sata and the PF took over
government from the MMD (Movement for Multiparty Democracy), Zambia had a total
debt of US$ 1,667.6 million.
Just in the three months of taking over
office, it added US$312.4 million bringing the debt to US$1,980.0 million at
the close of 2011.
A year later in 2012 Sata’s government,
which has shown less or no respect to the reason of economics to pursue
political ends, increased the debt to US$3,179.6 million.
No one in government has explained why the
debt figures drastically increased. But much of the programmes that preoccupied
the new government after taking office included complete removal and replacing
of all diplomatic staff from embassies, by-elections caused by bribing
opposition MPs with deputy ministerial positions so that they resign to stand
on the ruling party.
In addition there has been a clueless rush
by the President to open new bureaucratic centres, creating districts in some
cases in areas that are only within 15 kilometres of the existing ones.
The government refused to be advised to
slow down on its projects despite that most of them did not have clear
objectives, apart for political expedience.
Opposition Forum for Democracy and Development
leader Edith Nawakwi asked Finance Minister Alexander Chikwanda to be bold and
admit that his first PF national budget had burst.
 |
| Nawakwi |
“What we have here is
a situation where my elder brother at Finance has burst his budget and he has
to look elsewhere for additional financing mostly to finance programme that
were unbudgeted for such as new districts and bye elections,” Ms. Nawakwi said.
Four months later, contrary to claims that
it folded back subsidies to raise money for infrastructure, government has nothing
to show for that. Instead of happily telling the country how much it realised
from subsidies and unveil projects where it is going to spend those savings, it
has shamelessly continued on a borrowing spree.
It has just drawn a K1, 740 trillion from
Eximbank of China to do L400 road project in Lusaka that has been given to AVIC
International Project Engineering Company. A project it would have funded from the
K2.3 trillion it said it would save from subsidies removal annually.
Yet more embarrassing is the decision to
take a loan of US$10 million (K50 million) from OPEC-FID to build schools.
Borrowing an amount six times less than the K300 million per month it purported
it would gain from killing subsidies, proves that Sata and his administration
are congenital liars.
.
Today we don’t even know as a country how
much we are saving from subsidies and how we are utilising those savings.
The leaders are not telling us so and the
media that trumpeted the removal of subsidies as a bold and progressive move
that would release money for infrastructure development are ashamed to write
the success story of the savings from subsidies. The story is not just there.
More desperate measures are brewing. Government
now wants to suspend paying pensions to civil servants for the next 10 years,
by unilaterally increasing the retirement age from 55 years provided by the
constitution to 65. This means the Patriotic Front regime will not share the
burden of raising money to pay pension to public workers, and it will keep from
the next presidential election the issue of unpaid pensions.
On top of that the government also wants to
stop the pension scheme of paying lump sum package to retirees.
Further, to show that it meant the opposite
when it promised more money in people’ pockets, the PF has introduced toll gate
fees on all road users including Ox-Carts in villages further pushing upwards
the cost of transportation as though the removal of fuel subsidy was not
enough.
On the backdrop taking away subsidies that
cushioned the cost of living on the ordinary Zambian and acted as a stimulus
incentive to production, government went to give a K1.5 billion (US$210million) contract to a Chinese technology firm ZTE for procurement and installationof Closed-Circuit-Television (CCTV) in the streets of Lusaka. This deal is now
being investigated for corruption, with Transparency International Zambia calling
it a wasteful project that is not a priority.
That is how financially undisciplined President
Sata and his government can prove to be. But we still want to ask where the savings
from subsidies are going.
Is it the same money that President Sata is
using to sneak out of the country, and the nation only comes to know about his
whereabouts when a photo of his press aide drinking champagne in a London Hotel
appears on the online media?
Or is it the same money that defence
minister Geoffrey Mwamba has found useful to travel across the country to
conduct a useless endorsement campaign for Sata? Is this campaign adding any
value to the efforts aimed at ending the poverty in the country?
The exaggerated paving of roads, creating
bureaucratic centres within 15 kilometres radius from State House, and building
expensive football stadiums where there are no lucrative football leagues will
not quieten the well thinking citizens of this country. Especially if these
projects leave the economy of the country in a serious basket case of debt and
makes citizens paying more tax to compensate for the idiocy of those in power.
NN
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