Increasing debt burden

The moral of the story is that you cannot spend more than you earn.

Our colleagues in Zimbabwe have run up a debt of nearly US$11billion- a figure towards which we are also hurtling at tremendous speed.

The reality is that for every policy decision Government makes there is an equal and perhaps greater resource force created in opposition.

For every road built there is an equal and greater force to fund it. For every public wage increase there is an equal and compelling demand for the requisite resource to be found.

In a matter of time the cumulative effect of policies  become an attack on the fiscus and wreak havoc with the budget that has been so finely balanced.

There is nothing like a cost neutral policy or development initiative. The 200 percent wage increase to the public service, ill advised, but obviously intended to pacify  civil servants has dealt  a mortal blow to Government credibility. The decision to increase consumption by way of increased emoluments sacrificed development considering that Government now has to borrow heavily to pay salaries every month.

This was bad stewardship, whose final outcome is yet to be realized, but which has raised hackles among our budget support donors who  do not appreciate the fact that taxpayers money from their countries will be spent on consumption, they would rather it was spent on direct projects support that will benefit ordinary Zambians. 

We are on our own if we consume. Others will support us when we invest to increase productivity.

It therefore follows that the wage increase coupled with other unplanned and unbudgeted expenditure are now resulting in the spiral of circumstances that are slowly driving down the Kwacha. This inexorable slide will continue until our currency finds its optimum level.

As it slides the cost of living will increase  as our fancied South African malls import equally fancy goods to satisfy our newly acquired appetite for imported fruits and vegetables over which vital foreign exchange is being spent to import.

At the end of the day it is the poor of the poor who will suffer the full brunt of inflation through higher transport costs and soon to be established toll gates.

As we applaud the “tremendous” achievements of the Patriotic Front (PF) as announced by Vice President Dr. Guy Scott, it would be helpful to alert the beneficiaries of the very final bill they will be made to pay for the developments.

It will also be helpful for the nation to be told the tally of debt and where exactly money for the various projects will come from.   

We fully support the ambitious programmes that the Government intends to implement, but it is important that we also know the cost. It is not fair to suffer the cost through a sliding Kwacha whose value may never recover.

Our colleagues in Zimbabwe have suffered the unsalutary experience of a runaway currency, which experience was only stemmed by the introduction of the United States Dollar  as a medium of exchange.  

We can only hope and pray that our technocrats are in control of the situation to stop the politicians from exacerbating an already volatile situation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              


Categorized | Editorial

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