Dictator president Michael Sata’s government is really running broke with financial resources after exhausting all the money on grand projects meant to appease electorates in various parts of the country in order to win votes, sources at Ministry of Finance and Bank of Zambia have disclosed.
According to sources, ailing dictator Sata has committed government treasury to so many unplanned and unbudgeted projects through mere pronouncements that were meant to win political support.
“Can you imagine this man was just waking up like God during the creation of the earth and would say I want a road, a stadium, a university, a school, a hospital, a district here and there without consultation with the government treasury and expected those things to merely emerge or germinate like plants using rain water,” sources said.
Sources said Mr. Sata has really put a huge strain on the government treasury and most of those projects may actually never be finished resulting in having a country that will have so many incomplete buildings and roads or some that will be highly compromised due to incomplete or poor construction.
“Can you imagine the Levy Mwanawasa administration working with former finance minister Ngandu Magande that was very meticulous in planning never managed to build a single university in seven years except transforming the already existing Mulungushi infrastructure in Kabwe and Nkurumah Colleges into universities. Mwanawasa only managed to build Mwanawasa (Mbesuma) Bridge along Tuta road and rehabilitation of other existing infrastructure. But now Sata ordered immediate construction of a multi-billion Muchinga-Miyombe road, about 6 universities, Palabana-Chirundu road project, Mongu Stadium, a number of hospitals and clinics, schools around the country to be done all at the same time,” sources said.
Sources said what Mr. Sata did not realise is that when he was making these political pronouncements such as creation of districts, there were already a number of on-going massive and very expensive projects that government was already contracted such as the on-going Mongu-Kalabo road project which is very expensive as it is almost suspended throughout due to the sand terrain, Bottom and Kasempa road projects, Lusaka ring roads and other urban roads in the country, Lusaka Stadium, plus a number of schools and hospitals that were already on-going which he should merely have concentrated on finishing them first before committing government resources to new and expensive projects.
Sources said what has made things worse for Mr. Chikwanda (Minister of Finance) is that the cost of construction has suddenly shot up because of the removal of fuel subsidies and corruption resulting in most of the contractors demanding and raising their quotations as provisions for amending is normally provided for in tenders depending on the particular project.
“There will be no amount of explaining and gallivanting around the country that will save Mr. Sata and his administration because the fact is government has completely run out of money. Can you imagine close to K10 billion demanded by the Election Commission of Zambia (ECZ) alone for every PF induced by-election and so far, next month the country has four by-elections (Kafulafuta, Solwezi East, Chipata Central, and Mkushi South) where MPs were forced to resign except for Chipata Central which arose as a result of nullification, plus this month’s Feira by-election,” sources said.
Sources said the removal of subsidies was not something that was planned at all and does not even appear in the Finance Minister’s speech to Parliament.
“What you are seeing now is a result of panic because there is no money in the treasury and the nation should actually brace itself for more higher taxes in the next budget (2014) in order to meet some of Mr. Sata’s careless contractual political pronouncements and obligations,” sources said.
Sources said it is so far not clear how government will meet the new salaries and conditions of service for civil servants which are due in September coupled with on-going university bursaries for thousands of students both within and outside Zambia plus government has to spend huge sums of money on Food Reserve Agency (FRA) to buy maize and other produce from farmers and also buy and supply fertiliser to farmers.
“What has further complicated the budget is that consumer spending has drastically reduced resulting in less tax collections by Zambia Revenue Authority (ZRA) plus the massive increase in none taxable incomes through the informal sector such as illegal street vending that Mr. Sata has allowed,” sources said.
Sources said with the high cost of living and doing business, more job losses are expected next year because companies are not selling and making profits plus the price of minerals which has been bringing some revenue for government has also been going down at the international market.
“Perhaps it may be too early to speculate now but the worst might even happen where we may end-up printing more money in order to run the economy resulting in the Zimbabwe style of inflation,” sources said.
The few financial awards and ratings they may be talking about now are a result of previous years of prudence expenditure and economic management under the MMD government and not the extravagance PF government whose results may only show in some years to come.
Sources said major banks such as ZANACO, Finance Bank, Barclays, Stanchart, may also not be willing to further lend the PF government any more money because they are already owed huge sums of money plus interest which is even running over-due.
“The only option now maybe to further borrow money from international market at higher interest rates which may send back the Zambian government into another Highly Indebted Poor Country (HIPC) which the MMD government under Mwanawasa and Magande managed to clear with very bad economic conditions,” sources said.
Sources said it was really up to the Zambian people to raise up and demand for accountability now before it is too late because the future does not look bright in economic management and the painful results of structural adjustments will only be faced by future governments.