RDA should cancel clause on interest on unpaid invoices – Kantanshi MP

Kantashi MP Anthony Mumba

Kantanshi independent member of Parliament, Anthony Mumba has called on the Ministry of Infrustracture and Ministry of Finance and their respective agencies to cancel the payments of interest on unpaid invoices as well as stand alone time in roads construction contracts as a solution to stemming debt accumulation.

The Kantanshi lawmaker stated that most of the debt that the country is accruing today and has accrued in the recent past is as a result of the above two components, which other countries and even other government departments have managed to successfully avoid.

If you take the debts that National Road Fund Agency – NRFA and Roads Development Agency has accrued and seperate the figures between principle, interest on unpaid invoices and stand alone time dues, you will see that the current debts are bloated by the later two components.

He challenged that NRFA/RDA needs to separate the debt they have in between principal, interest and stand along time and it will be clear that most of the debt is being accrued on stand alone time and escalated interest charges.This is also leading to huge amounts being paid but these are only catering for interest and standalone time leaving the principal on the debt virtually un-dismatlled.

Mumba further stated that the nation and government needs to start believing in its own people, Zambia can only be developed by Zambians. Their is need for the country to empower and develop its entreprenuer’s and award Zambian companies contracts or part value of the contracts to start building capacity for the future.

He lamented that the current 20% is not being applied on value but works. He gave the example of current Kenneth Kaunda International Airport construction who have paid out about USD199 million and only USD1.2 million has been paid to Zambian contractors.

“This payment of USD1.2 million is less than 1% and yet the minimum sub-construction should be 20%, in this case, local constructors and the economy could have retained about USD40 million if the 20% was applied” Mumba said.

He challenged the government that even the 80% of the contracts being awarded to foreign companies was high, a situation that is leading to 80% of the funds being externalized as these companies repatriate their proceeds taking advantage of Zambia’s liberalized foreign exchange economy

The Kantanshi independent lawmaker challenged the government to syndicate loans locally through the banks were government has shareholding such as ZANACO and Development Bank of Zambia – DBZ to come up with a solution to discount especially the local suppliers debt to unlock the local economy and release liquidity.

Government procurement is currently being centralized through the Zambia Public Procurement Authority – ZPPA, an institution that is expected to disproportionately award contracts to citizen owned and citizen influenced companies to ensure tax payers funds are spent within the Zambian economy to support local industrial and consumer growth.