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Wednesday, 18 September 2013

Debt Watch (OFID)

Zambia recently borrowed US$10 million from the the OPEC Fund for International Development (OFID) to help fund the education sector. The US$10 million loan will co-finance the construction of three technical colleges in Petauke, Sesheke and Solwezi districts. As a co-finance arrangement Government will need to meet the rest. The loan agreement was signed by OFID Director General, Mr. Suleiman J. Al-Herbish and Ms. Mwitwa Mulonda, Charge D’Affairs at the Zambian Embassy in Germany, who signed on behalf of the Zambian Government.

The education sector certainly needs funding. But is borrowing the answer? And as usual the terms of these loan agreements are not made public. Apart from the Eurobond no one really knows the terms of all the loans we have. There's no parliamentary accountability. Equally worrying is that we seem to borrow at every opportunity. The causes are usually good but the strategy appears misguided. How are decisions made about when and where to borrow? We do not know because there's no debt management strategy.

Chola Mukanga | Economist
Copyright © Zambian Economist 2013

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