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Tuesday, 22 May 2012

Zambia's neverending borrowing

Zambia's never ending borrowing frenzy continues under the new government without parliamentary oversight.

First we had the announcement that Government has signed a US$50 million loan agreement with the World Bank for "livestock development and animal health project".

Separately, the World Bank informed us that it had approved another US$60 million credit to Zambia as part of an effort to reinforce the existing electricity transmission network and increase Zesco’s power transfer capacity to Kafue town and the Southern Province. The development objective of the project is apparently to "improve the reliability of Zesco’s regional power trade transmission network infrastructure along the Kafue Town – Muzuma – Victoria Falls corridor".

The World Bank loan was clearly not enough because Government also is borrowing US$30 million from the European Investment Bank (EIB) for upgrading of the same power transmission line. No one knows whether this is the end of the borrowing for the power project because no one has told the terms of the loans or how much money is being raised in total. To be fair to Mr Chikwanda, no one is asking for an explanation!


  1. NONSENSE !!

    The govt needs to borrow money to make ends whereas Mopani (Glencore) owes govt $500 million for only 2003-2008

    and FQM (Kansanshi Mining) owes zccm-ih $517 million and zccm owes govt $320 m

    ZED IS UPSIDE DOWN !! Why does PF govt not hunt those looters ???

    According to NGOs in its 2010 pilot audit by Grant Thornton, Zambia and Econ Poyry, Zambia lost an estimated income of USD 175 million in tax revenue between 2003 and 2008 from tax avoidance practices’ by Glencore AG International owned Mopani Copper Mines.
    copper from Mopani is sold under a contract with copper in one instance being sold at 25 per cent of official prices at LME. In other words, they are not paying taxes over 75% of the copper sold to Glencore.

    "Zambia continues to lose on dividends from Mopani Copper Mines as the Glencore owned mine never declare any dividends to Zambia Consolidated Copper Mines InvestmentHoldings. During the period under review, Action Aid estimates that the Zambians government lost an estimated USD 50 million per year in undeclared dividends to ZCCM IH by Mopani.Copper Mines, according to Action Aid was avoiding declaring any dividends by ZCCM IH through transfer pricing and over statement of the costs."

    "The auditors found that MCM resisted the pilot audit at every stage. The company's book-keeping was incomplete, several legally required documents were lacking and the general ledger analysis showed several loopholes and couldn't be matched with the trial balance," the organisations stated. "The auditors also found an inexplicable doubling in the costs of the company between 2005 to 2007, which shows that the company has been artificially inflating its costs to minimise the profits shown in their books so that they could pay less taxes. Despite the fact that the audit was finished in the fall of 2009, it was kept secret."

  2. to make ;-)


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