By Chibamba Kanyama
Government has hired Highgate Advisory Limited as the GRZ Communications advisor for the debt management process at a total cost of £333, 403.54 (US$452,897.36 or K9.7 million). The task will be executed within a period of six months.
The Ministry of Finance has decided to publicly communicate this undertaking as one of the processes aimed at enhancing transparency on debt matters. I urge government to continue with this stance. We should give no room to speculation if our desire is to improve public perceptions on the governance of the nation.
The contention I have about this decision is that it is not properly placed. Last year, we engaged Lazard to advise on the restructuring of the debt and bring Zambia to debt sustainability levels. Lazard also came with legal advisors.
What I know is that any kind of restructuring goes with a communications strategy. I was team leader for the restructuring of ZSIC limited (spliting it into three entities). I worked with the consulting firm, First Mutual of Zimbabwe and the process took two years. The communications component was one of the seven key restructuring pillars (in other words, there was a communications strategy within the restructuring strategy).
What is debt restructuring without a communications strategy by those undertaking the assignment? I would have seriously thought the money being paid to Lazard included coming up with a communications strategy. This is not a presumption, we were told Lazard understood the expectations of stakeholders (including bondholders) and hence our engaging them. Is this not duplication of efforts, paying more money for an exercise that should be undertaken by Lazard? Lazard has no communications experts given the kind of work they do? Was the communications component an oversight for us to fail to understand its importance when engaging a restructuring consultant?
Given the meager resources before us as a country and the demand for prudence as stipulated in the Public Finance Management Act 2018, we need to demonstrate serious commitment to our own pronouncements. The Ministry of Finance should be ahead of all ministries in exercising frugality, due care and leadership with regards to public finance management. If we do not do this, even the newly launched Economic Revovery Programme will have little traction.
I advise government to consult more and more locally on such intentions before engaging external consultants at huge cost. There are certainly many Zambians willing to guide their own government on effective economic strategies at no cost. The debt problem is a battle for all of us and we want to see its back sooner than later.
Many blessings through the LORD Jesus Christ as I urge us to tap into His wisdom on such matters.