Kanyama calls for refocus of CEEF strategy

Kanyama calls for refocus of CEEF strategy
Written by Kabanda Chulu
Sunday, December 28, 2008 12:41:30 PM

ECONIMICS Association of Zambia (EAZ) immediate past national secretary Chibamba Kanyama has said there is need to refocus the strategy of the Citizen Economic Empowerment Fund (CEEF) because many Zambians feel the initiative is a non-starter.

Commenting on the Citizen Economic Empowerment Commission (CEEC)’s decision to address obstacles that have resulted in reduced applications for money under the empowerment funds, Kanyama said it had become evident that a number of applicants to those funds felt the whole initiative was futile.

“Several hundreds of citizens have in the past one year made many enquiries and applications for the Citizens Economic Empowerment Fund but it is becoming increasingly evident a number of applicants to these funds feel the whole initiative is futile, hence the need to refocus the strategy of the empowerment funds,” he said.

Kanyama observed that the communication criteria for accessing the money had not been very clear.

“In other words, we are not sure whether it is the commercial banks or provincial development committees responsible for disbursements and approval of applications. On the other hand, the secretariat has been under increasing pressure to disburse these funds before the end of the 2008 financial year, having lost an entire year in setting up administrative structures,” Kanyama said.

“And the demand for collateral before accessing these funds has contributed to growing disillusionment among the citizens and those with collateral are equally frustrated by the demand that such funds be disbursed to groups or cooperatives.”

He said it was unlikely that the CEEF would receive any more funds from the treasury in the near future.

“I do not think the critical stakeholders such as taxpayers will support it. Under the current disbursement arrangement, a number of potential borrowers will not access the funds and this will raise a lot of questions soon,” Kanyama said.

“And those that will access it are likely to fail under the current economic climate because it is very difficult to run a successful business operation in Zambia even under the circumstances of low interest rates as given by the CEEC.”

Kanyama said if the government truly intended to empower a cross section of Zambians through cheap and easy to access capital, the current approach was wrong and would not succeed.

“The moral hazard factor will come into play. As long as it is perceived to be government money, many beneficiaries will hardly pay back and I advise government to immediately restructure the loan-mode of these funds. No one should access hard cash. The money can be used to build industrial hives across the country where economic or production facilities can benefit all those with capacity to do. What Zambian entrepreneurs lack is production facilities that can help them produce goods and services,” said Kanyama.