THERE has been much talk about the Eurobond in the recent past, Zambian citizens have expressed mixed concerns about the usage of the said funds.
Some people have outrightly condemned the acquisition and subsequent usage of the bond, while others are in support of the initiative.
Whatever the case, education is power as they say, and therefore, sharing accurate information about the matter affords citizens an opportunity to appreciate Government’s efforts in such matters.
Zambia Institute for Policy Analysis and Research (ZIPAR), a body that ably qualifies to comment on such matters has made clarification on the subject.
The institute said that the latest Eurobond debt has been contracted at great cost and can only be beneficial if invested in viable projects.
ZIPAR was making reference to the US$1.25 billion Eurobond issued by Government that it will increase total interest payments on the three bonds taken out so far from about US$125 million a year to over US$240 million, or K1.8 billion.
Zambians need to believe the timely explanation made by ZIPAR if they have to allay fears of the unknown especially that the institution is a credible body involved in analysis and research.
Through a statement, we hear that the institute’s acting executive director, Caesar Cheelo has given guideline saimed at safeguarding the interest of all stakeholders.
ZIPAR feels that the Government should formulate credible spending plans, which should be publicly announced for transparency and accountability.
It is felt that such a move should have clear and strengthened project selection processes that prioritise capital expenditure on viable, high economic return projects.
We are in agreement that there is equally need to improve tax administration and tap into new high-economic-return projects.
Further, we feel that it will also be prudent for Government to rationalise spending on non-priority areas as it has been alleged in previous information.
As ZIPAR has rightly observed, the fact that borrowing has come at a time when there are so many headwinds and when we are about to enter an election,  Government should avoid the temptation and pressure for fiscal spillages.
The fear among Zambians is justifiable considering that the latest Eurobond has been issued against a backdrop of myriad economic difficulties the country is experiencing.
Is it not everyone’s fear that the $1.25 billion Eurobond has come in the wake of a depreciating Kwacha, a much higher-than-budgeted fiscal deficit and a widening trade deficit?
Added to such concerns is a reflection of falling export revenues due to lower copper prices, challenges with the mining tax regime; and declining non-traditional exports.
Understandably, the aforesaid are not the only challenges but also include a 30-50 per cent drop in electricity supply, a move likely to reduce production and productivity.
Government need to take heed that the third Eurobond should provide some relief to the weakening Kwacha and also reduce the reliance on short-term expensive domestic debt.
In the height of uncertainty brought about as a result of insufficient knowledge about the Eurobond among citizens, ZIPAR’s advice can be said to be timely and of great relief. OPINION