FOREIGN Affairs Minister Joe Malanji has written the Chinese Ambassador to Zambia Li Jie asking him to expedite the disbursement of a loan to facilitate the speedy implementation of the FTJ Chiluba University in Mansa.
According to Ministry of Higher Education records, the US$255 million contract for design and construction contract was awarded to China Energy Engineering Group to construct the FTJ Mansa and FTJ Kasama universities.
Zambia’s current external debt stoke as at February this year stands at US$11.2 billion, and Finance Minister Dr Bwalya Ng’andu had assured that government would freeze unnecessary loans which had not yet been disbursed in order to retain the country on a debt sustainability path.
“In my address in July 2019, I indicated that the Ministry of Finance would engage different Government ministries in order to agree on projects to be slowed down, re-scoped, cancelled or postponed. We proceeded to undertake this process. The outcome of these consultations was a Cabinet memorandum which Cabinet considered on 20th December, 2019. At its meeting, Cabinet directed that the following measures be undertaken: (a) A moratorium on contraction of external project loans; b) Cancellation of selected external project loans; (c)Re-scoping of selected externally financed projects in order to reduce the project cost, and ultimately reduce the undisbursed loan balance,” Dr Ng’andu said on February 14, 2020.
And Bank of Zambia Governor Dr Denny Kalyalya, five days later, expressed concern that Zambia was making almost no progress on austerity measures aimed at bringing down the debt position.
“The out-turn largely reflects higher-than-programmed spending on capital projects. Our call is for effective and sustained implementation of fiscal adjustment measures. What has to be clear is that, it’s not the expectation that, tomorrow, or this year, or next year, you can get debt sustainability; I think we will be kidding ourselves, let’s be very clear on that,” said Dr Kalyalya at a press briefing.
In his letter to the Chinese Embassy dated, April 21, 2020, Malanji said the FTJ project was very important and was among the loans that had been approved despite the country’s dire financial situation.
“As you may be aware, the Zambian government has cancelled or re-scoped all externally financed infrastructure loan project as a measure to restore the country’s debt to sustainable levels. However, the government has decided to proceed to implement the FTJ Chiluba University project in Mansa and Kasama as per original scope of the project. This decision was made because the construction of the FTJ University is an important project as it has several benefits to the nation because of its strategic location and catchment,” Malanji wrote.
“Further, government has already fulfilled all the requirements for disbursement of the loan, including the disbursement of 15 percent of the total contract sum to the contractor. These resources would be lost to government and the people of the two provinces if this project does not proceed as planned.”
The Minister told the Chinese Envoy that the loan was urgently needed because the said university would have a state of the art school of medicine that would play a scientific role in the fight against COVID-19.
“The project, particularly the state-of-the-art school medicine at the University is critical in the context of the rapid spread of the coronavirus that is ravaging the entire world. In this regard, I wish to appeal to your Excellency to assist in facilitating the speedy disbursement of the loans in order for the Zambian government to begin the substantial works of the project. Please accept, Your Excellency, the assurances of my highest consideration,” stated Malanji.
According to a 2017 National Assembly Report from the Committee on Government Assurances, when the FTJ Chiluba University contract was awarded, it also provided for the construction of an additional university in Kasama District with a bed capacity of 1,500.
The Committee learnt that the project was a design and build contract and that initially, US$225 million dollars which would have catered for 3500 bed capacity, for the construction of the FTJ Chiluba University was secured, but later, it was decided to split the money to build two universities, leaving 45 per cent for the construction of another university in Kasama.
And when asked to explain why the university was a priority given the huge debt status and the COVID-19 crisis, Malanji said it was an old pending project.
“That university is a project which was done a long time ago so there is nothing new about it. It is not a newly constructed project so I don’t know where the excitement is coming from. You are a journalist, I am sure you remember the late President Michael Sata pronouncing the FTJ University. Even in your papers, you will find that that program was covered by you people even before. It is an old pending project, they did the re-scoping. I am sure you are aware that we are re-scoping quite a good number of projects. So upon satisfaction, the Ministry of Education wrote to us saying ‘please re-engage the project, it is a project which has been pending.’ so we go accordingly as per procedure. So it has not been given a priority, it is not something new. COVID or no COVID, government cannot stop working,” Malanji responded.
And when asked if it was his Ministry’s responsibility to follow up and ensure that contracted loans were disbursed, Malanji said it was within his mandate and there was nothing sinister.
“Do you know that we are the inter-face of all programs? Do you know that even when a Minister of Finance is going to engage himself in anything which he is going to sign outside, Foreign Affairs has got to give a letter of credence? You are not aware? So all those programs outside, they go through the Ambassador here and they go through our Ambassador in Beijing. I am the right person to engage them. Nothing sinister about it. Me as Minister of Foreign Affairs, when I go outside the country, I can sign a document on behalf of any ministry. Whereas Ministry of Education cannot sign on behalf of Ministry of Agriculture. As I am going to the office, there are quite a number of letters from Ministry of Agriculture written to us to engage the specific engagements outside. And when they come, we send them to the portfolio ministry that is how we operate,” said Malanji.