Q FM Africa's Modern Radio
The Jesuit Centre for Theological Reflection (JCTR) has urged Parliament to guarantee the country from sovereign insolvency by not heeding to the dictates of the Executive on further debt contraction.
The JCTR says the country will pay a high price in terms of further social and economic polarization which include diminished investor confidence and higher future taxes, if Parliament approves government’s midyear budget proposal on increasing the debt ceiling from the current K35 billion to K60 billion.
The Centre has urged Parliament not to entertain Finance Minister Alexander Chikwanda’s argument that Zambia’s public debt currently standing at 29 percent of GDP is still sustainable and therefore warrants room for further debt contraction.
The JCTR contends that Zambia’s public debt as a share of domestic revenues has already reached the critical threshold of 15-20 percent beyond which austerity measures will have to be undertaken.
It says Zambia should not embark on reckless additional debt contraction, stating that the way ahead for the country is to take tough decisions, tough choices and fundamental socio-economic transformation without which the current situation will worsen as the country proceeds into an election year.
The Centre further recommends a wide range of policy proposals which include a reconsideration of the nation’s taxation system as well as guaranteed public policy consistence and a re-evaluation of some of the current capital and infrastructure projects.
It adds that government needs to do more in terms of reducing unnecessary expenditure including closure of some embassies that have hugely contributed to the current crisis.
The JCTR further states that Zambia’s current economic malaise though it has some historical attributions, has been worsened by poor fiscal governance attributed to poor policy choices, noting that there is a massive mismatch in national policy priorities.
The JCTR says it is disturbing that of all the reasons advanced regarding the dismal economic performance recorded in the first half of the year resulting into a K20 million deficit, government has all but blamed it on exogenous factors and not once have they taken responsibility for some poor outcomes stemming from reckless policy choices they have pursued.