- Goal Diggers
- Guest Diggers
Zambia under sanctions, as govt admits defaulting loan repaymentBy Stuart Lisulo on 25 Dec 2019
The African Development Bank (AfDB) has put Zambia under sanctions for failing to repay its loans contracted to implement various developmental programmes, according to the Ministry of Finance.
In a statement released, Tuesday, the Ministry of Finance admitted owing the financial institution an outstanding US $1.4 million, but stressed that the reason for defaulting was on account of the kwacha’s depreciation against major convertible currencies, which had pushed the cost of repayment in local currency higher.
The sanctions entail AfDB suspending the release of funds to Zambia on all existing projects funded by the Bank and not approving any new loan or project to Zambia.
Zambia joins Zimbabwe, Somalia and Sudan on the list of blacklisted countries.
But the Ministry of Finance stated that government’s default should not be a cause for alarm or panic by any stakeholder, stressing that the US $1.4 million balance will be cleared in due course.
“Government wishes to inform the nation that the information circulating on social media to the effect that the AfDB has put Zambia under sanctions for failing to repay loans should not cause any panic. Government acknowledges that the AfDB Group did write to the Ministry of Finance, yesterday, December 23, 2019, to inform the Ministry that as of yesterday (Monday) the Bank had not received full payment in respect of Bank Group bills. The Bank Group added that, in accordance with the Bank Group policy on loan arrears recovery, it wished to inform government that sanctions had been imposed on December 15, 2019. It was further stated that the Bank Group counted on government’s prompt action for the timely settlement of the amounts due to enable the lifting of sanctions,” disclosed the Ministry.
“The position of government on this matter is that payment of the outstanding amount of US $1.4 million is being processed and will be finalized as soon as possible. The delay in the settlement of the bill was due to the sudden depreciation of the kwacha, which increased the volume of the kwacha needed to settle the amount. It must be understood that the government budget is always in kwacha and if there is a sudden and significant adjustment in the exchange rate, the Ministry of Finance may experience challenges in meeting obligations payable in foreign currency. This is normal and may occur from time to time.”
AfDB is one of the major financiers of the Zambian government, having provided crucial developmental financial assistance since 1971.
Since then, the Bank had committed more than US $2 billion to public sector infrastructure projects, including agriculture, industry, water and sanitation, energy and transport.
Additional support from the Bank, valued at around US $150 million, had been allocated to the country’s private sector.
Zambia also benefited from debt relief valued at $452 million under the HIPC and the Multilateral Debt Initiatives.
In April, 2019, the AfDB approved $11.1 million to support Zambia’s public finance and economic management as part of efforts to restore fiscal stability and improve livelihoods in the middle-income bracket.
The AfDB Group is Africa’s premier development finance institution, comprising of three distinct entities: the African Development Bank (AfDB), the African Development Fund (ADF) and the Nigeria Trust Fund (NTF).
On the ground in 41 African countries with an external office in Japan, the Bank contributes to the economic development and the social progress of its 54 regional member-states.
About Stuart Lisulo
Stuart Lisulo is an experienced journalist with a focus on business news.
Email: stuart [at] diggers [dot] news
- Copper prices maintain downward trend amid fast-spreading Corona outbreak - 29 Jan 2020
- Support us, we’ve dealt with Social Cash Transfer issues, Lungu tells diplomats - 24 Jan 2020
- Court jails Lusaka man 5 years over illegal trophy - 24 Jan 2020
- Copper prices fall on fears of Corona virus - 23 Jan 2020
- High mealie meal prices will persist – IAPRI - 23 Jan 2020
- Suspected ritual killers turn into cats when we try to arrest them - Katanga (3,578 views)
- It’d be dangerous to give PF another 5 years under Lungu – Kambwili (2,407 views)
- Kaputo gets death sentence for killing Precious (2,338 views)
- Lusaka teacher gets 1 year for corruption (2,267 views)
- Chingola riots a sign of people's anger against govt lies (2,093 views)
- Lungu’s chances of winning 2021 are nil – Sangwa
- Copper prices maintain downward trend amid fast-spreading Corona outbreak
- Lungu hails revamped $35m Zamanita plant
- Sumaili washes hands on Seer 1: I can’t confirm if anyone got his power
- Court sets March 5 for hearing application in Kabulonga teachers, retirees’ eviction case
- Sinda residents stole from me instead of helping after my accident, laments Mkaika MP
- Porn addicts fail to function in marriages, says Sumaili
- Challenge me, but if you rock the boat, we’ll throw you out - Lungu
- Chingola riots a sign of people's anger against govt lies
- Those who see our mistakes must advise us - UPND
ArchivesFeb0 PostsMar0 PostsApr0 PostsMay0 PostsJun0 PostsJul0 PostsAug0 PostsSep0 PostsOct0 PostsNov0 PostsDec0 Posts
- January 2020
- December 2019
- November 2019
- October 2019
- September 2019
- August 2019
- July 2019
- June 2019
- May 2019
- April 2019
- March 2019
- February 2019
- January 2019
- December 2018
- November 2018
- October 2018
- September 2018
- August 2018
- July 2018
- June 2018
- May 2018
- April 2018
- March 2018
- February 2018
- January 2018
- December 2017
- November 2017
- October 2017
- September 2017
- August 2017
- July 2017
- June 2017
- May 2017
- April 2017
- March 2017
- February 2017
- January 2017
- December 2016
- November 2016
- October 2016
Send this to a friend