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World Debt Day, 16 May 2008
Jubilee-Zambia/JCTR Announce “FINISH THE WORK” on Debt Campaign!
14 May 2008
With Zambia still failing to deliver on major promises on reforms of the loan contraction and management three years after the attainment of the HIPC completion point, Jubilee-Zambia has launched a campaign urging government and creditors to “FINISH THE WORK” on Debt.
“Having Zambia’s debt cancelled was one of Jubilee-Zambia’s major goals from inception ten years ago and it was a moment of relief to see Zambia’s debt cancelled in the last three years,” Says Muyatwa Sitali Coordinator of the Debt Aid and Trade Programme of the JCTR which hosts Jubilee-Zambia. Some creditors have delivered their part of debt relief amounting to well over US$5 billion while some creditors such as Brazil and Russia have not yet done so. This is one of the weaknesses of the creditor institutions who did not abide to the requirements of the HIPC process through cancellation of all the debt. At the international level, our call to these countries which have been “free riding” is that they should “Finish the Work” by delivering their part of debt cancellation.
In Zambia, the delay to reform the debt legal framework, failure to implement a debt management strategy and the lack of a debt policy continue to be major structural weaknesses which can be taken advantage of to reverse the gains of debt cancellation. Zambia’s public debt is still being governed by the old piece of legislation, CAP 366 which provides excessive authority to the Ministry and the Minister of Finance and National Planning in issues relating to debt contraction. Statutory Instrument 53 of 1988 which is still being applied gives authority to the Minister to borrow in any particular year external and domestic debts of up to K20 trillion and K5 trillion respectively. Parliament’s oversight role is subordinated and parliamentarians’ authority is only limited to making contributions in broad discussions to approve projected debt service rather than providing a framework for borrowing.
These weaknesses are a recipe for another debt trap as lending institutions continue to offer credits to Zambia following Zambia’s improved credit rating after HIPC. It is therefore essential that the Government of the Republic of Zambia should implement debt management policies and strategies and ultimately put in place a debt management legal framework which provides parliamentary oversight, induces regular debt management strategic plans and a transparent and broadened debt contraction process. Jubilee-Zambia, on the occasion of this fourth World Debt Day, 16 May 2008, therefore announces its “Finish the Work” Campaign which calls on government to stick to its promises to reform the debt legal framework.
We recall that the Minister of Finance and National Planning has made promises to reform the loan contraction and management process. In the 2008 national budget address, the Minister indicated that government will “intensify efforts to consolidate the legal framework governing the contraction and management of debt.” This needs immediate follow–up with a clear map of action in order for Zambia to effectively put in place mechanisms that can provide Zambians with a better way of managing public debt. We, therefore urge the government to “Finish the Work” by quickly producing a road map for this process and making sure the legal framework is completed and implemented by 2008. We continue to point government to the JCTR proposed Debt Management Bill which provides for Parliamentary oversight and creates space for broader transparency and accountability to the Zambian people in the contraction and management of public debt.
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Debt and Aid
Trade
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