Patel Challenges Government On Debt

The former Minister for Commerce Dipak Patel is petitioning the Constitutional Court with regards to the Government’s contraction of debt without Parliament’s oversight or approval.

Patel claims that because of this practice the amount of debt contracted by Government is unknown and could be more than has been publicly declared. As it stands billions of dollars of debt have been contracted without consultation of the National Assembly.

According to the Minister of Finance Bwalya Ng'andu external debt stock stood at US$11.2 billion in February 2020. The debt has increased almost 6-fold from just US$1.9 billion in 2011. 

Meanwhile, Government has reported that domestic arrears stood at K26.2 billion in September 2019, with debt reaching 80% of GDP by the end of 2019 as compared with 35% in 2014.

However, Patel is seeking an order that would compel the Dr Ng’andu and the Attorney General to present a complete account of public debt contract since 2016 to the National Assembly.

According to Patel the failure of the Minister of Finance and Attorney General to present such loans before Parliament is illegal and a breach of the Constitution, as per the Amended Constitution of 2016 Article 63.

Patel argues that it is wrong that in order to get information on the current debt situation in Zambia is it necessary to check the details provided by foreign institutions or the information within annual reports of specific government departments. This has led to confusing reports.

“The 2016 annual economic report shows that government’s total domestic debt as at the date of that report excluding arrears increased by 33.5 per cent to K32.98 billion in 2016 from K24.70 billion recorded in 2015. It further shows that external debt stock at the end of December 2016 increased by 3.7 per cent to US$6,947.1 million from US$6,704.4 million in 2015 and that in 2016 government committed to 24 new loans amounting to US$ 3,458.95 million.

“In 2017 government contracted 18 new loans amounting to US$1.75 billion compared to 26 loans amounting to US$ 3.09 billion in 2016 which shows discrepancy with regard to what was reported as loans contracted in the 2016 annual report,” Patel claims.