Zambia: Government commences Debt Swap for all CIVIL Servants, No deduction to be made in next three Months

The government yesterday commenced the process of debt swap across the civil service.

This followed a signing ceremony of the addendum to the current collective agreement on the implementation of debt swap for the civil service between the Government and the Public Sector Unions.

Information and Broadcasting Services Permanent Secretary Amos Malupenga said therefore no deductions will be made from Salaries of all civil servants for the next three months effective immediately.

“All Civil Servants having Loans and advances will get their full salaries for the next three months starting from July,” he added.

Mr. Malupenga said the debt will be owed to their employers in this case government. He said third-party institutions will be directly be dealt with by their employers.

Mr. Malupenga explained that the Unions have been engaging government help in dismantling the debt burden amongst public Service employees who owe various financial institutions in form of loans for a long time now.

“The debt swap is not a condition of service but an attempt by the employer to mitigate the civil service debt,” he added.

Mr. Malupenga clarified that the debt swap will restructure the debt of the civil service so as to help raise the take-home pay.

And Speaking on behalf of the Unions present, Zambia Union of Teachers (ZANUT) General Secretary Newman Bubala has commended the government for the move.

Mr. Bubala has called on all stakeholders not to politicize the government’s good intentions but work towards providing workable solutions.

He has advised members who will benefit from the initiative to refrain from reckless borrowing in the future.

Mr. Bubala added that the Unions have committed themselves to spend resources to engage their members on financial literacy.

Meanwhile, President Edgar Lungu has said that his government had started working on a debt swap mechanism in early 2020, first beginning with public service employees, in order to reduce the burden on the working class, after noting that even those in employment would be affected negatively by Covid-19 as the cost of living increase due to reduced forex liquidity and disruptions in global trade.

Commenting on a number of other measures to deal with the economic hardships, President Lungu said that this mechanism will see government clear off all payroll taxes for all government employees against allowances such as settlement allowances, leave allowances, gratuities, among others.

“This debt swap will be voluntary. It is expected that households that are currently paying their various obligations will have more disposable income,” the Head of state said..

The president also said that his Government is also looking at mechanisms of introducing a debt swap for those working in the private sector as my government acknowledges that all citizens are equal.

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