But when contacted, Local Government Permanent Secretary Amos Malupenga said he had not seen the letter in question, adding that it would be difficult for him to comment on a letter that was addressed to another ministry.
“It is difficult for me to comment if the letter is not addressed to us. I am not aware of that letter and if there were some issues, I am sure that they (Germany Embassy) would have written to us,” said Malupenga when asked what he knew about the complaint from the donors.
According to the complaint letter dated September 25, 2017 and addressed to former Minister of Water Development and Sanitation Lloyd Kaziya, the Germans terminated the agreement and demanded a refund, which was paid.
German Ambassador to Zambia Achim Burkart stated in the said letter that the water and sanitation sector was one of the long-standing focal areas of the German-Zambian development co-operation.
He added that for financing investments in the sector, they had established two so-called ‘basket mechanisms’ which were managed by the Zambian government.
Ambassador Burkart disclosed that in order to cover up an illegal withdrawal from the urban basket in 2016, Ministry of Local Government and Housing forged a bank statement, and as a consequence, the German Federal Government terminated the urban basket and about €3 million was returned to its budget.
“As Chairman of the water cooperation partners, I wish to refer to our open discussion of April 6, 2017 concerning also some critical topics the water sector is currently facing. Please allow me to bring to your attention unfortunate incidents relating to our co-operation, which highly concern my government as your cooperating partner. As you know, the water and sanitation sector is one of the long-standing focal areas of the German-Zambian development co-operation. For financing investments in the sector, we have established two so-called ‘basket mechanisms’ which are managed by the Zambian government,” read the letter.
“In order to cover up an illegal withdrawal from the urban basket in 2016, a bank statement was forged by the Ministry of Local Government and Housing. As a consequence, the German Federal Government had to terminate the urban basket and an amount of about three million Euros was returned to the German federal budget.”
Ambassador Burkart had further stated that during bilateral negotiations in December, 2016, the German side expressed its concerns and its wish for a transparent management of the remaining financing basket for rural areas.
He stated that the two parties had agreed that an auditor would be appointed by the Ministry of Water and Sanitation to undertake an audit on the use of all the funds made available, but as of September last year, no audit report had been made available to the German government.
“During the bilateral negotiations in December 2016, the German side also expressed its concerns and its wish for a transparent and trustful management of the remaining financing basket for rural areas. Therefore, both sides agreed in the minutes of negotiations that in the case of irregularities, the German side reserves the right to undertake appropriate steps (e.g termination of the program). We have also agreed that an auditor will be appointed by your ministry to undertake an audit on the use of all the funds made available under this basket,” read the letter further.
Ambassador Burkart expressed his government’s deep concern about the happenings.
“Unfortunately, it came to my attention that apparently, non eligible costs were made available under the rural basket fund and that the KfW, due to the violations of the Financing Agreement, suspended disbursement with immediate effect. This had already been communicated to your permanent secretary,” stated the letter.
“Honourable Minister, please allow me to express my government’s deep concern about these above mentioned facts. It will be highly appreciated if you would give me an opportunity for a personal meeting in order to discuss further steps. In this conversation, I would also like to discuss another issue that is characterised as a reputation risk for the German federal government.”