Jubilee Zambias engagement with Parliamentarians and Government on Debt: 12'09'08

1
Jubilee Zambias engagement with Parliamentarians
and Government on Debt12.09.08

• Study and Strategy meeting on illegitimate Debt
  Quito
• Priva Haangandu, S.J.

2
Overview

• Brief Highlights of recent trends on Debt and
  Debt Management
• Current legal, Policy and Institutional
  Structures
• Recommendations
• Jubilee Zambias Legal Proposal

3
Brief Highlights of Recent trends in Debt
management

• As JZ involved in research, education and
  consultation on issues of debt contraction,
  management and repayment for the purpose of
  external debt cancellation and to avoid the
  country going back into debt
• With Zambia having reached the HIPC Decision
  Point, and the MDRI, a large part of Zambias
  debt has been cancelled reducing external debt
  stock from about US7.1bill in 2004 to about
  US1.8bill in 2006
• However, a number of challenges are posed as post
  HIPC homework for Zambia Taking advantage of NCC
  training MPs for critical contributions in
  parliamentary debates
• 1. how to avoid reverting into debt crisis
• 2. how country can continue to put up public
  infrastructure that would ensure both economic
  and human development without borrowing to
  unsustanable levels.
• 3. how to effectively ensure the people of Zambia
  benefit from debt relief and overall debt
  resources arising from recent and future debts
• As JZ we are saying we need to ensure that legal,
  institutional, and policy weaknesses which led to
  the occurrence of the debt problem in Zambia be
  eliminated

4
Current legal, policy and Institutional Structures

• Our research indicates nothing much has changed
  from the period before the debt crisis and after
  HIPC with regard to Debt laws, the institutional
  arrangements among the executives, the
  legislature and the public. What will stop
  reversion, then? Political authorities still
  monopolise the mandate to loan contraction no
  restriction on them CAP 366 the act requires
  the that the minister of finance raise loans on
  behalf of the Republic, leaving the entire loan
  contraction process at the mercy of an individual
  with a finite term of office. With current
  concerns about public fraud, the national
  coffers are open to corruption and fraud by an
  individual in the short term and
  inter-generational misapplication of resources in
  the long term
• Lack of public accountability
• Currently we have no debt policy and strategy to
  guide the management of our debt this is
  worrying because debt has been one of the major
  problems that has held back the countrys
  progress in terms of development
• Zambia does not have a centralised comprehensive
  domestic debt database the data is fragmented
  in the MoFNP, BoZ, Pension Fund and Government.

5
Recommendations

• Decentralise borrowing powers establish
  semi-independent debt management office which
  will be governed by a board that reports to a
  select committee of parliament
• Select committee of parliament that assesses debt
  issues and reports to parliament Debt advisory
  committee
• Strengthen the monitoring capacity of the debt
  stock and strengthen debt strategy and policy
  when to borrow, at what terms, and for what
  purposes!
• Rest cf. The JCTR Legal Proposal on handout!
• We are saying to Government and NCC (for Debt
  Management Bill) Finish the Work! Reform the
  loan contraction and debt management framework by
  enacting comprehensive debt management Law.
• So not only have the remaining donors to finish
  delivering Zambian of debt, Government too needs
  to honour its promises to ensure we do not revert
  to unsustanable debt crisis