Monday, June 17, 2024

Emmanuel Mwamba Raises Concerns Over Zambia’s Use of $750 Million World Bank Loan

Share

Emmanuel Mwamba has put the UPND government under pressure to explain how it spent a $750m concessional loan from the International Development Association (IDA), a branch of the World Bank Group, after concerns were raised over the country’s growing public debt.

Amb Mwamba has asked the government to clarify how the funds were used, particularly as they were not directed toward any tangible projects.

“The Zambian people are entitled to know how their money is being spent, and we need to see the government be more transparent and accountable in their use of public funds,” Mwamba said in a statement.

The loan was disbursed in 2022, along with a $1.3bn Extended Credit Facility (ECF) from the International Monetary Fund (IMF), of which the first installment of $185.7m was also released in 2022.

Zambia is currently awaiting the release of a further $188m from the IMF, following a recent staff-level agreement review.

According to the World Bank, the $750m concessional loan was used to support concessional development policy financing (DPF). Concessional loans, also known as soft loans, offer more favourable terms than market loans, including below-market interest rates and grace periods for debt payments.

Zambia’s growing public debt has raised concerns, with the Minister of Finance, Dr. Situmbeko Musokotwane, revealing that the central government foreign debt stood at $14bn as of March 2023. The country’s total public debt was equivalent to $31.6bn, excluding interest arrears, and $32.8bn, including interest arrears.

Musokotwane stated that the Ministry has continued to engage Zambia’s external creditors in an effort to restructure the country’s debt.

The Zambian government is now under pressure to demonstrate how the $935.5m from the two concessional loans was spent, especially as they were not directed towards specific projects. The country’s citizens are calling for greater transparency and accountability in the management of public funds.

In response to the concerns, the Zambian government has stated that the funds were used to support critical sectors such as health and education, and to address the impact of the COVID-19 pandemic on the country’s economy.

However, Mwamba argues that more transparency is needed. “We need to see clear evidence that the funds were spent effectively and efficiently, and that they have made a real difference to the lives of the Zambian people,” he said.

The Zambian government has acknowledged the need for greater transparency and accountability, and has committed to providing more information on how the funds were used.

“As a government, we understand the importance of transparency and accountability in the management of public funds, and we are committed to ensuring that our citizens have access to accurate information about how their money is being spent,” said Musokotwane.

The government has also stated that it is working to address the country’s debt crisis, and has engaged with external creditors to restructure its debt and improve its financial stability.

2 COMMENTS

  1. Where is the magic we were promised b4 elections? The loans aren’t disappearing???? On the other hand they are increasing!!!

  2. It is immoral for PF to talk about surging local and foreign debt because they authored these unsustainable liabilities.
    It is extremely embarrassing for UPND to look like they secretly are repeating same mistakes without showing what they used recent loans for.
    Instead of Zambia folding arms letting Paris Club do maths for us, I think it would help if our president flew to Beijing to bilaterally discuss how best we can conquer our indebtedness.
    Let’s think differently and learn to learn from past mistakes while those that failed us in the past shouldn’t look like everything must always revolve around them.

    2
    2

Comments are closed.

Read more

Local News

Discover more from Lusaka Times-Zambia's Leading Online News Site - LusakaTimes.com

Subscribe now to keep reading and get access to the full archive.

Continue reading