Economy

Zambia’s ‘Real’ Debt Stands At $30 Billion – Dr. Nevers Mumba

Former MMD president Dr Nevers Mumba says Zambia real debt stands at US $30 billion disputing finance minister Felix Mutati’s projection which is quoted at $7.2 billion.

Dr Mumba, who is now one of the prominent supporters of UPND leader Hakainde Hichilema, has published an article on his Facebook page backing his claim and challenging the Zambian government to be truthful.

“Considering that there is much confusion among Zambians on what the correct debt position is, we did our own research and concluded that the figure of $7.2 billion Mr Mutati gave is simply not true.

“Based on evidence gathered from a variety of sources, we have found that the true figure appears to be at least 4 times larger than stated.

“Our preliminary figures, based on information in the public domain, show that at a minimum, the true debt position is about $30 billion!!!” he states.

BELOW IS THE FULL ARTICLE BY DR MUMBA

ZAMBIA’S HIDDEN DEBT CRISIS: THE REAL DEBT IS $30 BILLION!

By Dr Nevers Sekwila Mumba, 28th July 2017

On 21st June 2017, Finance Minister Felix Mutati gave a ministerial statement in Parliament in which he said that Zambia’s foreign debt stock stood at $17.2 billion. After much debate and discussion, he clarified later on that he had misspoken and that the correct figure was actually $7.2 billion. This figure was challenged, most notably by Mr Trevor Simumba, a Zambian financial analyst.

Considering that there is much confusion among Zambians on what the correct debt position is, we did our own research and concluded that the figure of $7.2 billion Mr Mutati gave is simply not true. Based on evidence gathered from a variety of sources, we have found that the true figure appears to be at least 4 times larger than stated. Our preliminary figures, based on information in the public domain, show that at a minimum, the true debt position is about $30 billion!!!

In 2011 when the Patriotic Front (PF) government took office, Zambia’s external debt stood at $3.5 billion (15% of GDP). Using the government’s own figures, it has ballooned to $7.2 billion (34% of an estimated $21 billion GDP) in 2017 and the year is not yet over. But the World Bank as of 2015 put the debt at $8.7 billion (by 2017 it is certainly around $10 billion). Using our computed figure of $33 billion, it is 157% of GDP. 40% is the government’s own acceptable threshold.

The list below, which is certainly not exhaustive, does not count other loans for 2017 still in negotiations such as the Lusaka-Ndola dual carriageway which will cost not less than $500 million and it does not factor in local debt ($4 billion) or arrears owed to contractors ($1.7 billion). We have also not factored in an estimate of unknown loans. We estimate that the grand total of all debts is anything from $35 billion to $40 billion.

To make our research more complete, we have also taken into account debt servicing. Below the list of loans is the list of debt servicing per year from 2011 to 2015 based on data from the World Bank. We have added our own estimate for debt servicing for 2016 and 2017. Also of note is the fact that the government has this year requested for an additional $8 billion from China to fund infrastructure development! This shall make the debt position far worse than anything imaginable for Zambia.

What is clear from all the information available is that Zambia is sitting on a massive debt time bomb that shall explode in a very big way within the next 5 to 10 years. Based on projections of current economic growth rates, Zambia will not manage to pay off those debts in a sustainable way. A sovereign debt default and significant credit rating downgrade is a very real possibility.

We do not claim perfection in our research and there is a chance that there could be gaps in our information. We therefore call upon Mr Mutati to issue another ministerial statement and shed light on this matter with the true debt position because it appears the Zambian government is being economical with the truth. Zambians need to know the real debt position so that they can anticipate what is coming ahead of us economically.

The IMF is already in negotiations with the government for a $1.6 billion bailout and they also need to know the truth, the whole truth and nothing but the truth in order to determine how much they can lend because they need to know our capacity to repay.

LIST OF MAJOR LOANS (2011 – 2017)

1. Kenneth Kaunda International Airport: $360 million (2014)
2. Poverty reduction projects: $13.5 Billion (2012)
3. Poverty reduction programmes: $6.7 billion (2011)
4. 750MW Kafue Gorge Lower Power Plant: $1.7 billion (2015)
5. 360MW Kariba North Bank Power Plant Expansion: $430 million (2014)
6. Lusaka L400 roads: $300 million (2013)
7. Copperbelt International Airport (Ndola): $400 million (2017)
8. Lusaka de-congestion: $286 million (2017)
9. Communication towers: $280 million (2017)
10. Copperbelt C400 roads: $418 million (2015)
11. Chipata-Serenje railway line: $2.3 billion (2017)
12. Mongu-Kalabo Road: $287 million (2011)
13. 2,000 Military Houses: $157 million (2017)
14. Mansa-Luwingu road: $242 million (2012)
15. Water and sanitation programme: $135 million (2016)
16. Mbala-Nakonde Road: $180 million (2011)
17. Lusaka sanitation project: $130 million (2015)
18. Kafubu water and sanitation project: $104 million (2014)
19. National Heroes Stadium: $94 million (2011)
20. Levy Mwanawasa Hospital Expansion: $90 million (2015)
21. Kafulafuta Dam water project: $449 million (2017)
22. Housing project for security wings: $275 million (2015)
23. International Development Assistance programme: $600 million (2017)
24. Rural roads project (World Bank): $200 million (2017)
25. Environmental Remediation and Agribusiness Development: $106 million (2016)
26. Miscellaneous small loans: $300 million (estimate)
27. Debt position of previous government up to 2011: $3.5 billion
TOTAL EXTERNAL DEBT: $33.5 billion

ANNUAL EXTERNAL DEBT SERVICING

2011: $229.6 million
2012: $230.1 million
2013: $325.9 million
2014: $396.0 million
2015: $507.3 million
2016: $660.0 million (estimate)
2017: $800.0 million (estimate)
TOTAL: $3.1 billion

ESTIMATED NET EXTERNAL DEBT: $30.4 billion (2017)

29 Comments

  1. OneNation

    So, Pastor Mumba, you are convinced with your figures that Government contracted loans of $6.7 billion and $13.5 billion in 2011 and 2012 respectively? Which lending houses can provide such loans to a country like Zambia in a year? Please let’s be careful with speculative figures.

    • The Banker

      @ OneNation-Zambia is not getting these loans from one country,but many countries and corporating partners.The problem i have noticed in Zambia is that political partronage and caderism has blinded so many people that they stop being logical to the wrong things that their preferred party-PAYA FARMER(PF) is doing.

      • MMD SYMPATHIZER

        Dickson Jere,please Dr Mumba is NOT FORMER MMD PRESIDENT.HE IS THE BINAFIDE MMD PRESIDENT.Forget about the RB shameless acts with Ecl using spineless Mutati for that bogus semblance of a convention.Where haveever seen in a just legal system an injuction being thrown in the night in the absence of the other party?Which legal MMD Organ sanctioned the Convetion to held?,What was the composition of the Electrol College? Etc.So many illegalities.No wonder the Supreme Court were shocked on how this RB/MUTATI convention was ‘allowed’ to go ahead.

    • Sj

      Dr/Pastor Mumba your article may be speculative or true, but what as citizens of this nation we need WHEN you take the platform are solutions to our nose diving ZMK, after you’ve laid your record straight. Late M.C.Sata(M.H.S.R.I.P) used to try to offer solutions part of what could’ve seen him in power finally. Twalinaka ukwikata ichinga ukwakaba. Comment

  2. ON

    So, Pastor Mumba, you are convinced with your figures that Government contracted loans of $6.7 billion and $13.5 billion in 2011 and 2012 respectively? Which lending houses can provide such loans to a country like Zambia in a year? Please let’s be careful with speculative figures.

    • Nweno

      Please be logical.If really your worthy wasting breath on,do your own research with figures,then you can argue or give counter position to what Dr Mumba has given rather than just waffle from being a PF useful idiot position.

  3. Joseph phiri

    Maybe that happened when he was vice-president

  4. fest

    arrest him for not saying the truth.

  5. Rodger

    Mumba you are not giving us the actual amount but your position based on your calculations from the public domain.The correct figures is $7.2 as given by our finance minister.

  6. Pastor with a cigger

    Pastor Mumba, as much as i certainly find your concern and hard work by coming up this figure, there is one Major financial principle lacking in your report. As a matter of concern the bases driving your national estimated external debt accumulated, the whole formula used is not true and fair to arrive at your estimated figures, Please if justifiable,why fractuating?, and if helped by some financial experts,your figures clearly disputes external financial lenders you have mentioned in your report sir. For example sir, the IMF,WORLD BANK and China as a few have their own loan expert advises who would at a highest level approve a loan based on external debt estimation which is comprehensive, hence your report to me is questionable.thank you for this hard and involving work you came up with.

  7. wise man

    U Zambians u can’t even think through the matter well…This country is going down…Even though u are for pf ..Try to think wiser as citizens…

    • Wise Me

      You may be luck that the majority of voters in Zambian have no idea what this means for any presidential candidate. Simply mentioning problems without stating the solution when you are
      aspiring to be in power is being an ALARMIST. If that were true any in-coming government will have to pay that debt. So your article should spell out your objective(s). But if you are celebrating then you don’t deserve to lead an indebted country like Zambia. Such debt makes a manfesto of a party a nightmare. Don’t create problems when you have no solutions for.

  8. chitamawe

    Fault finder.

  9. kauzganga

    A minister vomiting 2 figures ? Ah! Useless

  10. Bupe

    Too bad as a country surelly where are you going get the money to pay back .I gree that Zambian’s encomy is going down.

  11. DR JAMES

    Why calling him pastor? Let him read Rom13:1-3. Learn to say the truth. Respecpect the government.

  12. mulongoti

    Why tell the nation now since 2011 Dr mumba has no vision and since he knows what he’s he doing abt it am disappointed as a Zambian with Dr mumba

  13. lawrence chungu

    Mozambiq next door was found wantin by IMF/world Bank in a similar situation,remember Gruce,in South America too.So this is de common problem Globaly.The minister gave 2 different figures Dr Mumba sounds convinced but not sure. Your Excellence Sir,find out de truth from de minister & save our country.concered citizen!

  14. Chisenga

    AND BY THE WAY HAS MUMBA PAID BACK THE GOVERNMENT MONEY HE AND HIS WIFE EMBEZZLED IN CANADA IN THE PRETEXT THAT THEY HAD HOSTED AN EXTRAVAGANZA.

  15. oracle

    Since 1964 Zambia depend in borrowing money, now when did Zambia will be a donor.

  16. Aurent

    Comment: Mumba, bitterness and jealous has made you lose both divine direction and self respect. To me you ‘re the most sadist clergy I ever head of.

  17. Jc Sk

    Most likely in Heaven not on this planet EARTH.

  18. Daywalker

    We can borrow even $100bn. If it is used profitably there is nothing wrong with it.

  19. mumba

    ba mumba,u hav listed de funds spent project and ar various across de country.thanks for telling de public dat PF is a working gorvnmt. viva ecl

  20. best

    but why lying

  21. Zam@55

    I am out of Lusaka right now, but those who are coming from Zambia are saying that the country is getting better every day, Is it Never Munba who is funding the projects?
    If it is not him please let him shut up, Zambia shall not be saved because it is already saved

  22. igwe

    We wait

  23. SMI

    let us help not worsen the stiuation just saying

Comments are closed.