Fat reserves mean nothing if…

…Sean Tembo says the US$6.5 billion foreign reserves government is boasting about are meaningless if Zambians remain poor, accuses the UPND of masking deeper economic challenges using flamboyant figures

By BARNABAS ZULU

ZAMBIA’S economic progression cannot be proved by abstract economic concepts such as the US$6.5 billion foreign reserves because such changes demand practical initiatives that should affect and improve the lives of the ordinary citizen, Sean Tembo has argued.

Mr Tembo, the former president of the Patriotis for Economic Progress (PeP) says while foreign reserves are a reality, the truth is that they are not translating into economic emancipation of the poor Zambians.

Mr Tembo has argued that the country’s record foreign exchange reserves of US$6.5 billion were meaningless if ordinary citizens continued to struggle with poverty and businesses remained starved of capital.

In a statement yesterday, Mr Tembo challenged the government’s portrayal of the reserves as evidence of sound economic management, saying the figures mask deeper economic challenges, including rising domestic debt, unpaid government arrears and increased borrowing.

Mr Tembo said while foreign reserves are generally regarded as a sign of economic stability, they should not be viewed as an achievement in isolation.

“Foreign reserves are to a country what savings are to individuals. Savings are important because they provide a fallback during difficult times, but they are not an end in themselves. You cannot grow your wealth through savings because the returns are generally very small. You need investments to grow wealth,” he said.

He argued that keeping billions of dollars in foreign bank accounts benefits foreign economies more than Zambia.

“When Zambia deposits US$6.5 billion in New York banks, what we are basically doing is creating jobs for US citizens at the expense of Zambian citizens.

Our money is borrowed by investors in the United States while our private sector remains dormant due to lack of access to reasonably priced capital,” Mr Tembo said.

Mr Tembo said that if he were Minister of Finance, he would invest part of the reserves into a local Development Finance Institution to provide affordable financing to Zambian businesses.

“I would rather use US$3 billion of that money to establish a local Development Finance Institution that would extend reasonably priced finance to the local private sector than enrich already wealthy Americans in New York,” he said.

Mr Tembo also argued that the reserves should be viewed alongside government’s growing financial obligations, claiming domestic arrears had increased from K18 billion in 2021 to K96 billion as of May 31, 2026.

Mr Tembo also claimed government had significantly increased both domestic and external borrowing over the past five years while accumulating the reserves.

“In short, Government has borrowed about US$18.1 billion over the last five years while increasing foreign reserves by only about US$3.5 billion. That cannot, in my view, be regarded as commendable economic management,” he said.

Ends.