‘Debt relief must benefit the poor’

On July 1, the World Bank cancelled US$2.7 billion of the International Development Agency IDA) debt for Zambia under the Multilateral Debt Relief Initiative (MDRI), having reached the completion point last year under HIPC.

Finance minister Ngandu Magande said the “freed resources” would go towards improving education and health through the recruitment of more teachers and health personnel, including the securing of drugs in health centres.

Magande said Zambia had saved US$150 million of the envisaged US$180 million projected this year.

He reiterated the government’s commitment to borrow money for useful projects and not for unplanned for programmes as a way of paying back for the sacrifice people made.

The Foundation for Democratic Process, Jubilee Zambia, the labour movement, the Chartered Institute for Certified Accounts and other major role players believe that Zambians deserve a relief after sacrificing to reach the completion point under the Highly Indebted Poor Country (HIPC) scheme, a condition for external debt relief.

Fodep National Secretary Stanley Mhango said the onus was on the government to channel the savings, amounting to more than US$150 million, to the health and education sectors. The freed resources, according to Mhango, should be utilised towards alleviating the poverty of the people, most of whom are living below the poverty datum line.

Mhango, whose body champions electoral issues in the country, noted that the government’s access to external debt relief should be extended to the people, including public workers: “We appreciate the government’s prudent economic management, the fruits of which we are now enjoying, but the people should take the centre stage, because they literally sacrificed their lives to make Zambia reach the completion point and get external debt relief,” said Mhango.

Besides education and health, Mhango noted that the government should increase food sufficiency, saying that more than 70 per cent of the vulnerable people were surviving on less than a US$1 per day.

The Zambia Congress of Trade Union, a grouping of labour unions, believes that it was time for the government to look after the welfare of more than 120,000 public service workers who were subjected to a wage freeze to enable the government achieve debt relief status: “They are the real heroes in this fight, because they had to forego wage increments for more than two years at the peak of government’s bid to win debt relief,” said ZCTU president Leonard Hikaumba. “The savings should also mean improved salaries for public workers, because the worker is the most underpaid employee in the country.”

Public service workers, mainly unionized, survive on US$300 salary a month for higher paid and US$150 for lower paid employees. Non-unionized public service workers survive on US$100 a month, far short of their basic needs.

This, Hikaumba said, was particularly true in Lusaka where rentals fetch an average US$100 for two-roomed houses in densely populated areas where most public service workers are housed for want of resources to secure decent accommodation elsewhere.

However, local debt campaigner Jubilee Zambia, while noting the success made by the government, seeks more prudent management of the resources freed and wants the government to amend the law that allows it to borrow unilaterally and subsequently ‘suffocating the people.’

Spokesperson, Jack Zulu said it was imperative for the government to involve all interest groups in the borrowing and utilisation of the freed resources, noting that debt relief was not the ultimate panacea for Zambia’s development.

July 2006
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