Most of the Eurobond most likely used to finance government consumption-World Bank Report

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The meeting between the Government officials from the Ministry of FInance and the World bank Officials

The World Bank says it is most likely that most of the Eurobond has been used to finance Government’s consumption.

And the World Bank has observed that the third Eurobond of US$1 billion did not have a detailed plan of how it would be spent unlike the first two.

In a report titled How to Borrow without Sorrow, the World Bank noted that where resources from the Eurobond had not been linked to specific investment, it is most likely that they have been used to finance Government’s consumption.

The report released last December shows that the first two Eurobonds were accompanied by a detailed plan of how they would be spent.

The third Eurobond however had no such plan, but that statements were later issued that the funds would be used for infrastructure.

It says most of the resources were earmarked for the transport sector and mainly the road sector.

The World Bank noted that most of the recent trunk road investments since 2011 have been delivered as part of the Link Zambia 8000 (US$5.4 billion for 8,000km of roads, 2012-17) and the Pave Zambia 200 project.

It says other urban road programs, include Lusaka 400 (US$350 million to rehabilitate and upgrade 400km) and the Copperbelt 400 (US$492 million for 406km).

“To fund these ambitious programs, the government utilized lending from China, other traditional and non-traditional development partners, and US$ 28 million earmarked from the Eurobond proceeds,” it states.

“There is not much argument about whether investment in infrastructure is necessary (Zambia’s infrastructure lags that of southern African peers and is important for growth31), but there has been concern about whether the right projects have been selected and whether value for money has been achieved,” the report says.

It observes that the road programs were very ambitious (9,000km of roads in five year) and that they were not well prioritized.

It further notes that a framework was absent to direct resources if less than US$6 billion were made available.

“When the available resources fell short of this figure, the selection of roads became haphazard and was not always motivated by economic and social returns. The cost of the roads has also been high relative to the cost of construction elsewhere in the region,” it read.

“For Zambian roads, the median cost of construction and upgrading of paved roads under 100km was US$457,000 per km per lane, and for roads over 100km the median cost was US$360,000. When compared to the median cost of paving roads in the region, Zambia’s roads stand out as being very expensive (box 8). It is often argued that Zambian roads are more expensive than other countries’ in the region because of the higher cost of inputs such as steel, cement and bitumen.”

The report however states that the difference in the cost of bitumen and cement explains only some of the high cost of Zambia’s roads.

“The reason for the high costs relates more to poor public investment management (especially a lack of competitive tendering) and long delays in payments. The much higher costs of road building increase the avenues for corruption,” it says.

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59 COMMENTS

  1. The report clearly speaks for itself! When we in the UPND have been telling you that PF is mismanaging the economy, we have been called all sorts of names by the blind PF supporters. Public funds are being stolen left right centre. Even the same pf amongst themselves are accusing one another of theft. Yet when kambwili reports the mastermind of stealing aka lungu, people think he has lost his marbles. Kambwili knows what goes on within the PF ranks. He is a very strong witness to the corruption of PF.
    Now watch how quiet the PF cadres will be on this article. Also watch how bootlickers like Ndanje khakis will find a way to defend PF even when their theft has been uncovered by an independent organisation.

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    • This is Chikwandanomics at work. What they forget is that Zambia is more urbanized and becoming more urbanized.It follows that governing Zambia will call for better and better quality of government than Zambian politics has been able to deliver so far. Urban people are more likely to organize and cause trouble because ideas and information move faster than in a rural setting. We face this situation now in Zambia. I doubt it there’s one person in the PF govt who knows and/or cares about this.

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    • That 2016 extravagant PF campaign was funded by Chikwanda, who had cheque book for Eurobond.
      But no one can audit that.

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    • Do you people think Chikwanda approved anything without approval from Lungu and cabinet? This collective bunch of thieves knew what they were doing. The results can be seen today in the various houses being built in Zambia and abroad by PF officials. That is where your Eurobond is Zambians.

      Zambia is now like a volcano nearing eruption. And we know who is to blame.

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    • As much as $2-billion was looted by lungu & his cronies in the run up to 2015, 2016 elections. Some came from chinese loans, part was from 3rd eurobond. That $500 million that was about to be loaned to Zesco by lungu & lewis mosho is part of that money. Stag Africa, the fake company they used, is not even a registered company in South Africa, check on wwwDOTciprozaDOTcoDOTza

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    • Very few people will comment on such an important subject. But let Kambwili be arrested again and you’ll have over 100 comments which shows that we are not taking developmental issues seriously. Look my fellow Zambians we have been spending billions on very poor road works, right now 90percent of all feeder roads are in a very poor state and this is truelly a criminal act because funds were spent on these roads to be worked on professionally. Then the habit of our govt to spend millions of dollars on luxury SUVs must change, top govt officers must be made to travel our roads and feel how bad they are by using the ordinary Corrola and Noah that 90percent of Zambians travel in.

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    • What we already know, GOVT revenues died in the early 80s on UNIP’s watch. And it got worse after the mines got sold/privatized.

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    • WB should have titled the report “Chibiwi No Plan”…we warned about these lazy empty tins but as usual the simpleton foooools called us bitter now we are all going to pay for your greed and stupidity
      Let roll on with the mediocrity

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    • “When we in the Animo Farm have been telling you about our need to support the local team, our tribesmen, you tell us that we are tribal…”

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    • Having read the whole 46 page report actually titled World Bank Zambia Economic Brief, theme of this article is total manipulation & attempt to misinform especially 1st paragraph. Whereas report recognises debt situation as an issue it emphasises problem to be debt management & not debt itself. It recognises achievements in infrastructure & stability of economy with positive forecast. Nowhere is it stated ‘most of eurobond most likely used to finance government consumption’. At page 2 & 32 of report there is table that shows planned use of each of the 3 eurobonds & explanation that 3rd eurobond had a line for $410m which did not specify use of funds & this was most likely used to finance gov’t consumption. Let us please stop this FAKE news & MISINFORMATION & concentrate on building…

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    • … Let us please stop this FAKE news & MISINFORMATION & concentrate on building our country. God Bless Zambia

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  2. A World Bank observation: “the selection of roads became haphazard and was not always motivated by economic and social returns.” A case in point are the roads in New Kasama where there is little to show for but President Lungu and his ministers have acquired land. Another good example is the tarring of Phases 1& 2 of the main road to the exclusion of Phase. It is all because there are top government officers in Phases 1 & 2, among them Deputy Speaker of National Assembly Malama Mwimba. I was told by Avic workers when I was last there that even President Lungu’s personal physician leaves there. Then talk about the roads that sprung up in that area on the left of Memorial Park not far from the American Embassy. Ba Lungu & friends have properties there!

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  3. We will tell you what happened…..after the first eurobonds the PF rats were exclaiming how we need roads after which investors will come flooding in…..they built some roads then waited for the investors to be tripping over each other, at the same time the 3rd eurobond arrived…..mamamama , the PF rats were sure investores are comming flooding in , and the eurobonds will pay for them selves , so the last eurobond is to now enjoy…..lungu even started dancing spontenouly in public places….travelling non stop with PF ministers holding investor work shops every week abroad….

    No investores ……Let’s roll….

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  4. President Lungu’s infrastructure development in Lusaka has been one of the worst seen of any government in Zambia. It is at most selective. Look at the tarring of roads in Chelstone Green where Tasila Lungu has flats to the exclusion of Salama park where people built houses before the recent developments in Chelstone Green. It had to take the complaints of residents of Salama Park in the media before their roads could also be considered for tarring. This is certainly not how one develops the country. It is as bad as South African apartheid that was based on separate development of areas lived in by Whites and Blacks. In Zambia this separate development has taken the form of those who are close to President Lungu and those not known or related to him.

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  5. Hakainde Hichilema and the UPND have been saying this all the time.Now the World Bank has published a report on the same.
    So the world Bank is bitter like HH?
    PF cadres can hide behind lies forever

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  6. We told you that PF is mismanaging the economy and govt finances didn’t we? You made your bed now lie in it with your lowly 3% growth.

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  7. Very sad reading no wonder Zambia’s economic and social indicators are flat or in decline. Poverty and marginalization will be our reward.

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  8. When the PF rats saw lungu dancing spontenouly , even where there was no music , ati humble friendly leader …..kanshi lungu was dancing each time he thought of the eurobonds he now controlled…

    Can we see comments from the PF rats pleas …….citizen, cader , njimbu et al ….your thoughts pleas….

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    • The payed up bootlickrrs are consulting with ka chanda before responding …..they are trying to regroup for a coherent response…

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  9. Chimbwi no plan!
    In fact, the first two Eurobonds were most likely planned for by MMD, shows the difference between Musokotwane and Chikwanda. The later wholly owns the 3rd bond.

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  10. So no PF person has the guts to come out and comment and all they could do was send out mental patient Sharon?? Hahahaha

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  11. Its absolutely frightening that a whe Eurobond of US$1 billion did not have a detailed plan of how it would be spent. The kleptomaniacs who wield power in our corridors of state are plunderous, it’s treasonous that this can happen.

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  12. I am reading the report nafuti….can hardly believe my eyes….this wanton abuse of public office has to be brought to an end…one way or the other…..!!

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  13. This is shocking, – not because of most-of-the-Eurobond was used to finance PF consumption and thieving to corrupt voters but the SHEER QUIETNESS from PF puppet assets and cadres un able to comment on the world bank report. Its shocking and shameful to PF regime and its leadership.

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  14. This is ‘history repeating itself’. We have been through this before. These polemic arguments – P.F. vs the rest is for the benefit of politicians not for the ordinary citizen. Awake from your slumber Zambia!! P.F. may keep winning polls, but will the rustic benefit? We must, as individuals, ensure that we think with our minds, not with our hearts to ensure that once beaten,we are not beaten twice, especially by the same silly arguments.
    Imagine a President who spends his entire term without holding a single press conference or debating with others to challenge him, but appears to be wise at political rallies. The only reason is that he cannot carry an argument. How can you trust such a leader? Unless you are gullible.
    So much wealth and yet ever so poor. How can you explain this…

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  15. A Politician or Country that follows World Bank & IMF runs into a ditch just as anyone guided by an under-five. Only them see that AVIC and co delay the roads built over night. New new tyre now lasts 3 instead of 1 year and spares business is in decline giving all road users billions of dollars in savings to build houses, plough in nascent business and GO DANCING. Kids now spend more time in school and mothers being productive coz dust is gone. This World Bank under-fives report touted by their alters ignores that. Also ignores feeder roads program which covers more distances than the tar roads coz thats where World Bank aligned consultants lost out on fees to Chinese and new entrants. Plenty factories and properties follow the roads but under-fives don’t see that. No wonder you get so…

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    • “…Plenty factories and properties follow the roads but under-fives don’t see that…”

      Which factories ?
      Hehehehe……name one ?

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  16. A Politician or Country that follows World Bank & IMF runs into a ditch just as anyone guided by an under-five. Only them see that AVIC and co delay the roads built over night. New new tyre now lasts 3 instead of 1 year & spares business is in decline giving all road users billions of dollars in savings to build houses, plough in nascent business and GO DANCING. Kids now spend more time in school and mothers being productive coz dust is gone. This World Bank under-fives report touted by their alters ignores that & feeder roads program which covers more distances than the tar roads coz thats where W-Bank aligned consultants lost out on fees to Chinese and new entrants. Plenty new factories & properties follow the roads but under-fives don’t see that. No wonder you get so hit at the ballot…

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  17. Valid observations by Word Bank. However, h.h and his upnd is not the alternative leadership that we seek in Zambia.
    How many times do I have to repeat this kanshi imwe ama viplagers

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    • If the manager keeps failing the team , that does not mean sticking to the same failing manager because some corrup theives say there is no alternative ???

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  18. A Wemba na tuma tribal cousins ni amambala ngako! Kutilyela masuku pamutu!
    Let’s divide this country and let each province self-govern! Let the debt be divided proportionately. The regions that benefited the most should pay according to their share! The Northeastern block should know how to pay for this money since they were responsible for managing it! The northwestern block of the country should be spared and should only pay according to the share received. Federal is the way to go! Why should the entire nation be condemned on account of a few greedy persons?

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  19. If we don’t stop supporting political parties the way we support The Zambian National Team we will never develop if a political party is not doing the right thing please point it out .What I don’t understand is how does the downfall of the opposition parties benefit you as a mere citizen I understand why the government would want all the opposition parties to fall but I ask you who will keep checks and balances for you let’s be serious with our politics remember how much power the government holds they can make war if they choose. Politics is the deciding factor whether marketers trade in filth or if you will have clean water or if the economy fails .

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  20. There has only been one hindrance for HH it has always been that he is Tonga if he was Bemba or from Eastern Province he would be president by now I don’t like HH that much I prefer Chipimo to HH but between HH and ECL I think HH would do a better job if you can’t see the failure by this government then you are a football fan .So far the only thing the government has done is build roads with borrowed money something that even a fool can achieve .Please people open your eyes Zambia can be better than this .We are heading for even more disaster Zambia was meant for more than this

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  21. There has only been one hindrance for HH it has always been that he is Tonga if he was Bemba or from Eastern Province he would be president by now I don’t like HH that much I prefer Chipimo to HH but between HH and ECL I think HH would do a better job if you can’t see the failure by this government then you are a football fan .So far the only thing the government has done is build roads with borrowed money something that even a fxxl can achieve .Please people open your eyes Zambia can be better than this .We are heading for even more disaster Zambia was meant for more than this

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  22. Let us stop the hatred lets vote with our brains not with propaganda let us analyse each candidate on merit how would you not vote for someone because they are Tonga or Bemba .Think before you vote how can alll Tongas be tribal and bad people,How can all Bembas be thieves how can all Kaondes be witches the truth is we have tribal some Bembas,Tongas e.t.c we have thieves who are Tonga ,Bemba ,Lozi e.t.c .Tribalism is a Vilagers and old people mentality .Thinking that Tongas are Tribal is tribalism

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  23. Let’s just take over copper and emerald mines and make our own money. That way, we will not have to borrow at exorbitant interest rates. Road construction is at over US$400,000 per kilometer per lane with pay back period in years. We can buy an underground load-haul-dump (LHD) unit at US$500, 000 with Return-On-Investment (ROI) in hours. And if we have spent colossal amounts on just several kilometers of tarred road, how many more mining units could we afford? Plenty! Copper price is over US$6200 per ton. Emerald price is US$2500 per gram, not per ton, so why are we fooling ourselves leaving our wealth in foreign hands in the name of privatization and investors, or infesters as late President Michael Sata would call them? We need a Magufuli to run this country! We have a leadership…

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  24. The world bank is too big an institution to be doubting in its communication. it is either this or that not maybe. I hope the source of their info is not UPND.
    “The World Bank says it is most likely that most of the Eurobond has been used to finance Government’s consumption”

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