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Thursday, 1 January 2009

Fact Check (VP George Kunda)

The Vice President was quoted by the Times (and later in the Post) as saying:

"....donors had so much confidence in the Government, which was why the USA had given Zambia a grant of U$700 million through the millennium challenge account (MCA)...."
This is not true, as VOA accurately reports :

"....Zambia's selection makes it eligible to negotiate an MCC compact with the MCC. Becoming "compact eligible" is a huge milestone but, as Deputy Chief of Mission Koplovsky pointed out, there is still much work to be done before Zambia can receive an MCA grant. "Zambia has successfully managed the road leading to eligibility," he said, "but this announcement represents a new road that is just beginning...."


  1. Cho,

    Further investigation into exactly how the Millennium Challenge Corporation selects countries to become eligible to apply for MCA grants is also illuminating. For example, while it is a sign of confidence on the part of the US government that Zambia is now eligible, it is not a sign of greater confidence in the Zambian government than that of African states which are already "compact eligible" such as Benin, Cape Verde, Ghana, Lesotho, Mali, Morocco, Tanzania, Mozambique and Madagascar.

    As for the selection process itself, apparently they "grade on a curve" according to 17 criteria in 3 broadly defined groups (Zambia FY2009 Scorecard):
    Ruling Justly: includes Political Rights(76%), Civil Liberties(63%), Control of Corruption(71%), Government Effectiveness(69%), Rule of Law(65%), and Voice and Accountability(69%).
    Investing In People: includes Immunization Rates(55%), Health Expenditures(54%), Primary Education Expenditures(23%), Girl's Primary Education Completion(66%), and Natural Resource Management(53%).
    Economic Freedom includes Regulatory Quality(68%), Land Rights and Access(63%), Business Start-Up(82%), Trade Policy(62%), Inflation(26%), and Fiscal Policy(81%).

    Countries are not compared to fixed standards, but instead are only compared to others in the same income peer group, and by a "pass or fail" type of standard as well. If Zambia's performance in a given criteria is better than the mean score for the group, then it "meets the performance standard. Scores at or below the median, represented in red, do not meet the performance standard." By this standard, the country did quite well in FY2009, posting 15 out of 17 scores above the mean for the peer group (the Low Income Category contains some 65 nations from around the globe). However in no criteria did the nation excel (top ten of all nations in group), posting its highest (best) scores for Business Start-Up(82%) and Fiscal Policy(81%), with its lowest for Primary Education Expenditures(23%) and Inflation(26%).

    In addition to falling short in primary schools, Zambia snuck by just over the mean in most of the Investing In People category, with only the Girl's Primary Education Completion score above the 55th percentile (the reported numbers for which appear to have been adjusted upward significantly by excluding students who were absent but eligible for examinations from the sample entirely, see LT article.) If this "scorecard" were your child's report card, would you be bragging?

  2. I suspect George Kunda has no idea how the scoring works. He was keen to say something positive after the spell of bad news.

    By the way, assuming Zambia does cross that threshold, do we know the conditions normally attached these grants. I assume it would be tailored at improving those underperforming areas?

  3. Cho,

    I also would like to assume that the grants will be targeting to the underperforming areas, however the $22.7M or so spent during the "threshold eligible" stage (2006-2008) were, "aimed at preventing corruption in targeted government institutions, improving public service delivery to the private sector, and improving border management of trade." Here is the text from the MCCs Zambia page:

    Highlights of Program Activities
    Component 1: Prevent Corruption in Government Institutions

    * Reduce opportunities for administrative corruption in government institutions, namely the Ministry of Lands, Immigration Department of the Ministry of Home Affairs, and the Zambia Revenue Authority by:
    * Building the capacity of the Anti-Corruption Commission;
    * Implementing institutionally-tailored regulatory reforms to simplify processes and reduce opportunities for corruption;
    * Establishing internal watchdog units within each institution; and
    * Creating efficient public monitoring and reporting mechanisms to expose corruption.

    Component 2: Improve Effectiveness of Public Services

    Establish the Zambian Development Agency and Patents and Companies Registration Offices (PACROs) to remove administrative barriers to business and investment entry and operation outside the capital by:

    * Establishing the Zambian Development Agency as a one-stop-shop for investors and business people;
    * Simplifying the framework of economic regulations;
    * Setting up PACROs in provincial capitals; and
    * Improving the integration of the private sector into the nation's economic growth strategy.

    Component 3: Improving Border Management of Trade

    Remove barriers to trade and investment in the Zambian market by establishing a “Comprehensive Integrated Tariff System” that will unify all border-related fees and procedures by:

    * Upgrading and applying modern customs techniques and integrated border control and management in two pilot locations,
    * Improving the speed and efficiency of services provided by sanitary and phyto-sanitary units for local and export trade, and
    * Strengthening the standardization, certification and inspection units of the Zambia Bureau of Standards.

    Expected Results

    * Reduce the number of days to register property at the Ministry of Lands from 70 to 35.
    * Decrease the percentage of households reporting payment of a bribe to the Customs Division of the Zambia Revenue Authority from 14 to 7.
    * Increase the percentage of households and businesses reporting quality service regarding business registration from 41 to 60.
    * Reduce the number of days to export products from 60 to 30.
    * Reduce the number of days to import products from 62 to 30.

    Implementing Partners

    USAID will oversee implementation of the Zambia Threshold Program on behalf of MCC. The Ministry of Finance and National Planning will assume overall responsibility for coordinating the Zambia Threshold Program on behalf of the Government of Zambia. However, other ministries, public-private partnerships and civil society, notably the Anti-Corruption Commission, Zambia Business Forum, and Transparency International, will have supervisory and implementation roles as well.

    While these are all areas where Zambia scored better after the programs were implemented than before, they are clearly not designed to address the weakest areas on the scorecard. It would be interesting to know if the "Expected Results" came true.


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