Find us on Google+

Sunday, 8 August 2010

Debt Contraction Law

JCTR Press Statement on the need for new debt contraction law. This is something they have been pushing for a long time with predictably little response from Government :

Zambia Needs A Comprehensive, Transparent and Accountable Debt Contraction Law,  JCTR, Press Release (3 August 2010) : 

The issue of the K261 billion loan on mobile clinics from China has raised a lot of concern to organizations, political parties and the general Zambian public. This, says Sydney Mwansa (Programme Officer-Debt, Aid and Trade), arises from the fact that Zambia has continued to ignore the fact that it needs a more consultative, transparent and accountable debt contraction law. Debt has serious implication on poverty and sustainable development of the country as it takes away the country’s resources to debt servicing rather than on social service provision, infrastructure and developmental activities. It is for this reason that the Jesuit Centre Theological Reflection (JCTR) made a submission to the National Constitution Conference (NCC) to include a law that gives power to parliament ( and not the Minister of Finance and National Planning as provided by the current law) to oversee and approve all loans to be contracted by government on behalf of the Zambian people. This, of course comes from the background of indebtedness prior to the debt cancellation in 2006 for which the JCTR with other Civil Society Organizations championed. The NCC, however, failed to reach an agreement (two thirds majority votes) on this very important proposal from the JCTR and referred it to a referendum.

If Zambia had such a law, we would not have such a debate as parliament which consists of members of parliament who are the representatives of the Zambian people would have debated on the need of the mobile clinics and their sustainability and thus ensuring we were borrowing for the right reasons (Responsible borrowing). With this process, the Zambian people would have confidence in the loans contracted as it would have gotten majority votes if parliament deemed the loan as needful. On the other hand, if the majority members of parliament felt it was in no way beneficial to the Zambian people, public resources would have been saved as Zambians would not have to bear the cost of repaying a loan that was not beneficial to the country. Moreover, this law would ensure that the loans contracted are in line with the development plans of the country and thus avoid unnecessary debates and especially, justifications as we are currently having on the mobile clinics.

Issues of debt are always public matters that affect Zambians. As soon as a loan is contracted, it becomes a public resource and as such it becomes of public interest as repayment of loans uses public resources derived from taxes. The current law allows the government to contract loans without consultation and without transparency. As we talk about the mobile clinics or indeed, the hearses and any other loans contracted, let us all reflect on what we are doing to ensure that we have a debt burden free future. Is it the debates we are currently having that will solve the problem? With the draft constitution out and the time for comments already elapsed, there is surely something that could be done to ensure such loan deals and the debates that follow do not occur again.

Having suffered under the debt burden, it was imperative that we learn a lesson as far as debt contraction was concerned. With the greater part of Zambia’s debt written off, Zambia had chance to not only re-organize and direct her resources towards poverty reduction and infrastructure development but also ensure it borrowed for the right reasons and maintained the debt stock within sustainable levels. To achieve this, all Zambia needed and apparently still needs, is to “Finish the work!!” We says Sydney Mwansa, need to ensure the comprehensive, transparent and accountable debt contraction law is put in place to protect the Zambian people from the burden of paying for unnecessary loans that just worsen the poverty levels.

For more information, contact the Debt, Aid and Trade Programme at the Jesuit Centre for Theological Reflection, P. O. Box 37774, Lusaka, Zambia; Tel: 260-1-290410; Fax: 260-1-290759;

No comments:

Post a Comment

All contributors should follow the basic principles of a productive dialogue: communicate their perspective, ask, comment, respond,and share information and knowledge, but do all this with a positive approach.

This is a friendly website. However, if you feel compelled to comment 'anonymously', you are strongly encouraged to state your location / adopt a unique nick name so that other commentators/readers do not confuse your comments with other individuals also commenting anonymously.