The decision by government to borrow more money is worrying and reckless, says former Finance Minister Situmbeko Musokotwane.
He said it was surprising that just six months ago when Zambia acquired the US$ 750 million Eurobond and without properly explaining how the money would be spent, government was already thinking of borrowing in order to finance other projects.
Dr Musokotwane said it was now clear that there was no proper planning on both borrowing and government expenditure.
He describes the pronouncements by Finance Deputy Minister Miles Sampa that government will be borrowing more money from other countries as reckless.
He said the stance taken by the state was worrying because government has not explained how the money was being spent.
The former minister said that $120 million that government pumped into Zambia Railways was a misplaced priority because there was no feasibility study to determine the use of the money.
He said that project on which this money was being spent would not benefit Zambia as it was only meant for local use.
“All government did was to depend on the engineering plan which may need the repair of railway traffic lights and replacing rail lines but this is not what is required. They have not done a feasibility study that can determine what was really needed to revamp the railway system.
“This same money they are telling us is being used to repair the Copperbelt to Livingstone rail lines. But this will not benefit the country. It would have been better to rehabilitate Tazara rail line because of international economical gains,” he said.
Dr Musokotwane said it would be better for government to implement projects that would benefit the country economically.
He said Mr Sampa’s statement just showed that government was borrowing without working out projects on which the money was going to be spent.
Dr Musokotwane feared that reckless borrowing by government would only increase borrowing capacity for the country and if not handled properly Zambians would suffer.
“What is being done to payback what they are borrowing? What is the immediate impact on the money? There is no proper planning on how to spend the money. This is not what Zambia wants.
“We must learn from Cyprus and Greece. We need to strategise on borrowing and know the benefits for the country not just borrowing for the sake of wanting to be seen to be working,” Dr Musokotwane said.
Last week Finance Deputy Minister Miles Sampa revealed that government had exhausted the US$750 million acquired through a Eurobond issued last September.
He said there was no money left and that government wanted to go back to the international markets to secure more money for infrastructure development.