UNZA management has refused to get a K200 million loan to pay off retirees because they will not manage to pay it off.

Last month, Higher Education Minister Dr Brian Mushimba announced that the Ministry of Finance had approved an application for UNZA, through the Ministry of Higher Education, to acquire a K200 million loan to pay off retirees from 2011 to-date, who were still on the payroll.

Speaking during a press briefing shortly before he addressed retirees from UNZA in a closed-door meeting at his offices in Lusaka, Dr Mushimba said although some retirees had been paid, the loan would ensure those remaining were cleared.

He said UNZA management had been asked to source for funding on the local financial market.

But according to a highly-placed source, the University will not be attempting to secure the proposed loan because government will not be the guarantor of the loan facility, meaning UNZA would have to repay the entire sum, with interest.

“Remember that statement from the Minister (Dr Mushimba) that government had allowed the University to go ahead and get a K200 million loan? Government should be a guarantor for the loan, but they have not done so. What they have done is that, management should get a loan and be responsible for it in terms of paying the retirees and paying the interest. Now, this is the management, which is failing to pay salaries and then you give it that burden of getting a loan and paying it off? As things stand, management has refused to get a loan under those conditions, so there is no loan coming to UNZA. You can call the Vice-Chancellor to refute this information. So, the whole thing has started all over again! What the Minister told the nation was very misleading. What the Minister did was to inform the nation in order to appear to be doing something as a government, but what is on the ground is totally different,” the source revealed.

“That money was supposed to go to the University for the purpose of settling the debt owed to retirees as well as to members that are still serving the University in terms of gratuity and pensions. Government has refused that they don’t want to be responsible for that loan, but they are the same people who have to approve the loan. Ideally, any loan that the institution gets has to be guaranteed by government because it is a public institution. And now, if government withdraws and leaves everything in the hands of the institution, then the institution will not be able to pay off the loan because it is insolvent and it relies on government’s support. Government is saying the management should get the loan and find their own sources of repaying it instead of government itself paying it on behalf of the institution, which is strange. Any loan has to be got by government guaranteeing that they will be responsible for paying over time.”

But in an interview, UNZA public relations manager Damasake Chibale refuted claims that management had refused to get the loan.

“There are procedures that are being followed, the approvals and all that kind of stuff. At the moment, the money is not there, the loan has not yet been actualized, there are procedures that need to be exhausted. What the Minister announced was the approval from the Ministry of Finance. Now, there are all those procedures that are involved; we are a public institution so for us to go and get the loan, we need government’s support and approval. That announcement implied that money would be there the next week, but I think the Minister was implying that there is an indication of approval from the Ministry of Finance that the loan has been approved,” said Chibale

“The earlier conditions that were issued where management are saying, ‘look, we can only afford under this condition’ and then it has to go back for review of such conditions. Government has shown the indication of the approval of the loan, and right now, what is going on are the approval processes. The Minister did not indicate the release of the money to UNZA as a loan because that loan will be acquired from financial institutions so the money will not come from government. Now, because UNZA is a public institution, it has to first seek approval from government who are the owners of the University. These are normal process and they take a bit of time, but this is not an indication that UNZA has refused to get a loan because we definitely need money, especially to pay retirees. The whole process is that the one who gets the loan bears the responsibility to pay back. This is why I am saying we are going through the technical approvals and in the event that the University defaults, there must be a guarantor, which is government. So, these are some of the things that the technical teams both from the government and UNZA are going through.”