ADB completes line of credit to Zanaco, Investrust
By Mutale Kapekele
Sat 30 Oct. 2010, 04:00 CAT
THE African Development Bank has completed its US$ 13.5 million Line Of Credit (LOC) to Zanaco and Investrust banks which will be used to finance small and medium enterprises (SMEs) development.
Zanaco and Investrust banks have accessed US$ 10 million and US$ 3.5 million respectively for the five-year SME initiative that is expected to enhance the sector’s access to finance on more favorable terms.
During the launch of the SME initiative, ADB resident representative Dr Freddie Kwesiga said despite his bank investing US $1 billion since coming to
Zambia in 1971 and the current support of US $200 million, there was still a deficit in financing the private sector, especially SMEs.
He said the SME was an important sector to any economy as it employed many of the marginalised groups in society like women and youths.
Dr Kwesiga said his bank was committed to supporting Zambia’s development agenda by providing assistance in infrastructure development, regional integration and private sector development.
“The bank’s sectorial focus will include agriculture, energy, power and transport, hinged around national economic diversification programme,” Dr Kwesiga said. “Linked with the sectors I have mentioned, to the private sector we will focus on leveraging sector resources through supporting Private
Public Partnerships (PPPs), deepening financial intermediation in the financial sector to catalyse development of mortgage financing and support to SMEs through lines of credit as well as supporting reforms to provide reforms that provide wider competiveness and improved business environment.”
Dr Kwesiga said Zambia had a lot of opportunities to reduce poverty through PPP initiatives and partnerships with cooperating partners.
Labels: ADB, INVESTRUST BANK PLC, ZANACO
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14-year land lease for cane farmers at KASCOL expires
By Mwala Kalaluka in Mazabuka
Fri 29 Jan. 2010, 04:00 CAT
THE 14-year land leasehold for the over a hundred small-older cane farmers at Kaleya Small-holders Company Limited (KASCOL) in Mazabuka has expired.
KASCOL chief executive officer Rama Varma told a visiting delegation from the African Development Bank (ADB), Finnish Embassy in Zambia and the Ministry of Agriculture last Tuesday that the company was in the process of re-extending the 160 small-holders’ land leasehold.
“The lease has expired. Now we are trying to extend the lease period for another 14 years,” Varma said.
Varma said the out grower company had teething problems in the beginning because it lacked the capacity to repay its loans but that it has been able to do that now.
“Today we are existing with no loans in our books of accounts,” he said. “Today when you look back it is a success story.”
However, Varma said they had continued to pay for water from the adjacent Zambia Sugar’s Nakambala Estate.
He also said in view of the tricky scenario in the procurement of fertiliser on the market, KASCOL usually procures the inputs in advance and supply to the small holder cane farmers on credit.
Varma said the yields among the small holder farmers varied but that on average the cane farmers could sell between K45 million and K50 million on an annual basis.
“The early cutting of cane does factor in problems,” said Varma. “Those people who are cutting their cane early stand to lose out.”
Labels: ADB, KASCO, RAMA VARMA, SUGAR CANE
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JICA, Chambeshi Water drill 29 boreholes in Nakonde
Written by Jonathan Mukuka
Tuesday, September 01, 2009 4:24:30 PM
TWENTY-NINE boreholes have been drilled in Nakonde district in Northern Province to improve water supply under the government - counterpart funding.
The district would also benefit from an additional 54 boreholes at the cost of over K1.5 billion from the African Development Bank (ADB) funding.
The 29 boreholes cost over K690 million. Northern Province minister John Chinyanta disclosed this in Nakonde over the weekend when he officiated at this year's Mutomolo ceremony of the Namwanga people of Nakonde.
Chinyanta said 24 boreholes had been drilled with financial assistance from Japanese International Co-operation Agency [JICA] while Chambeshi Water and Sewerage Company had sunk five boreholes under the devolution fund to improve the water supply in the district.
He said that a number of boreholes, wells, and sanitation facilities had been constructed in communities around the border town under Development Cooperation Ireland, Rural Water Supply Programme.
He said that water supply in the district would improve tremendously after all the boreholes being drilled had become functional.
Chinyanta directed Chambeshi Water and Sewerage Company to improve on the supply of water to the consumers.
Nakonde residents have for many years been complaining about the water quality and quantity.
Only a small portion of the population in Nakonde had access to safe water from either boreholes or protected wells.
The rest of the population depended on water from either streams or unprotected shallow wells or scoops along riverbanks.
Labels: ADB, BOREHOLES, JICA
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Bizarre prospects for 2009 budget
Written by Editor
The channels through which the global financial turmoil affects developing countries include financial channels and other existent channels. Financial channels include effects through: stock markets, banking sector (borrowing from advanced economies, foreign ownership of banks, exposure to sub-prime market and other toxic debts), and foreign direct investment. The other existent channels include effects through remittances, exports, imports, terms of trade, and aid.
Zambia is experiencing capital outflows as a result of the global downturn and encountering significant fiscal pressures as revenue sources dry up, and expenditures rise to meet the most elementary levels of service provision as government battles to retain expenditure levels in the face of significantly reduced GDP growth.
We are witnessing that the export markets, are being restricted to imports, as a result of falling consumer demand and increased protectionism. The Lusaka Stock Exchange is in a downward spiral. Trade finance is drying up, budget revenue is more difficult to rise and some investments are being scrapped, resulting in job losses.
The current economic pressures are not of short duration, and will last a number of years. All major developed countries are in recession, and growth is slowing in emerging economies as commodity prices fall and capital inflows decrease.
Access to trade finance, which tends to be in dollars or other hard currency, is difficult to obtain and interest rates are high. Much-needed investment is also at risk, and aid flows are expected to fall. The rest of the world governments are putting together fiscal stimulus and tax reduction packages to help revive their economies and increase consumer and infrastructure spending.
Once again, since Zambia’s independence, the question of value addition to our minerals and diversification has come home to roost. The question also arises as to what is to be done about Private Sector Development Initiative, which for all intent and purpose - is stalled. Against the backdrop of extraordinary global uncertainty and the clear absence of policy responses to date, the prospect of the 2009 budget is bizarre amid the global financial crisis. There are number of issues.
The mining companies who had signed legal binding agreements with the government saw these agreements thrown out in the dustbins. Now the government is asking mining houses to adhere to “agreements” reached - how can one trust the government now?
Rupiah Banda in his campaign speeches and his inaugural speech talked of empowering all Zambians. Yet, he and his ministers are only too happy to see the Chinese own all the businesses in the Chambishi Economic Zone, as if they don’t know that the MMD government has also legislated the Citizens Economic Empowerment Act.
Providing for loans under Citizens Empowerment is but one small component of empowerment. This has simply replaced the previous Tourism Fund, Youth Fund in another name.
The issue of Citizens Empowerment is also critically about Zambians having an equity stake in all sectors of the economy. There is something seriously amiss the way they are going about empowering Zambians through only job creation and loans and not equity holdings for Zambians.
Only recently, Investrust Bank managing director Friday Ndhlovu advised the government that Zambians should have equity in banks. But it’s all falling on deaf ears.
When laying the foundation stone for the new Pepsi beverage factory owned by an Indian firm, Rupiah said that he was happy with the investment where the foreign company can take their profits as long as they created jobs for Zambians.
What bizarre thinking! He also said at another occasion, “I want to move from handouts to hand ups”.
Even before taking a considered view of the fiscal projections for 2009 and beyond, Rupiah authorised the reduction in fuel costs. And the first thing he did during his election campaign was to increase the fertiliser subsidy and broaden the range of people who could benefit from such subsidy and further drain the fragile resource base. From his very recent statement, it appears that he now intends to reduce the numbers of eligible participants in the Fertiliser Support Programme. It was obviously an election gimmick. It is not difficult to understand the complacency of this administration. And we hear that this year’s budget is the first budget in which Cabinet has had only a cursory debate.
The budget speech is only an indicator; the devil is in the detail – the Yellow Book. So what can we expect from the government in the absence of any serious policy responses? Is this the type of economic management we can expect?
Almost all governments have made or begun some sort of fiscal stimulus packages. In Zambia, it’s business as usual. The silence is deafening.
There is a need of calling on the developed countries and the IMF and World Bank to do things differently in Africa. Our government seems quite happy with the possibility of further loans from them or the ever-ready Chinese.
We need enlightened leadership and not acquiesce to the “Washington Consensus” which has now been shown to have failed miserably.
We would suggest that the Minister of Finance and Rupiah read the Oxfam policy brief, which deals with policy alternatives for poor countries, entitled “If not now, when?” (November 2008). Donald Kaberuka, the president of the African Development Bank, recently at the Cape Town conference of the ten African finance ministers and Central Bank governors, said:
“The impact of the global financial crisis on the African continent has been seriously underestimated. The fear now is that the numbers we are hearing is that almost all the benefits of the two decades of growth could be compromised”.
In Zambia, there is need for urgency in resolving our electricity problems and efficient manner of fuel procurement. The major concern will also be the expected three per cent or more of GDP lower fiscal revenues in 2009 and the rapidly increasing current account deficit expected to be about 10 per cent in 2009.
With this background, finance minister Situmbeko Musokotwane will present his first budget. We wonder who will be asked to tighten their belts this time. We hope it’s the government and not the people of Zambia.
Let us now wait and see what the 2009 budget may offer.
Labels: 2009 BUDGET, ADB, GREAT DEPRESSION II, SITUMBEKO MUSOKOTWANE
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Govt engages bailiffs to recover ADB’s K30bn
Written by Christopher Miti in Chipata
Friday, January 30, 2009 3:15:46 AM
THE Ministry of Agriculture in Eastern Province has engaged bailiffs to recover over K30 billion in unpaid Rural Credit Facility loans under Africa Development Bank (ADB).
And farmers in Petauke and Chama have finally received inputs under the Fertiliser Support Programme (FSP) that they did not get during the 2007/2008 farming season.
Provincial agricultural coordinator Dr Obvious Kabinda said a good number of farmers got medium term, seasonal and long term loans in 2000 and most of them did not pay back.
"There was an agreement for the seasonal. They were supposed to pay back within a year, the medium term was three years and a substantial amount of money was owed from us. Those who failed to pay we had to engage bailiffs so we just recently got the authority to go ahead so we are just now working on the documentation so that we update the records because when a good number of farmers heard that we are engaging bailiffs, they started paying back," Dr Kabinda said.
"We are updating our documents so that when the bailiffs go on the ground they should go with the exact figure which every farmer owes us and I can assure you that by the second week of February the bailiffs will be on the ground."
Dr Kabinda said the loan had gone to over K40 billion with interest and that they had recovered over K10 billion, leaving a balance of over K30 billion.
He said the large amounts of money were owed by farmers in Chipata, Petauke, Lundazi and Katete.
And Dr Kabinda said the government had finally issued 25 metric tonnes of Urea and another 25 metric tonnes of D compound fertilisers to Chama while in Petauke 42.6 metric tonnes of Urea and 42.6 metric tonnes of D compound were given to the farmers.
Dr Kabinda also said they had not yet received reports that some farmers were buying underweight fertiliser from some businessmen.
Labels: ADB, RURAL CREDIT FACILITY, RURAL FINANCE PROGRAMME
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AfDB calls for enhanced openness in economic development
By Kabanda Chulu and Kelvin Tembo
Monday June 16, 2008 [04:00]
THERE is need to enhance transparency and openness because they are powerful tools in economic development, Africa Development Bank (AfDB) vice-president Joe Eichenberger has said. And Information minister Mike Mulongoti said Zambia would not reach the vision 2030 unless every Zambian contributed fully to the country’s economic development. During the launch of the Joint Development Information Centre (JDIC) in Lusaka last Thursday, Eichenberger said the AfDB recognised that
knowledge was a critical factor in generating development.
“Knowledge is a powerful tool in almost all spheres of human endeavour but more importantly, this centre will enhance transparency and openness that are equally powerful tools in economic development,” said Eichenberger. “Access to knowledge has become an all-important factor in determining competitiveness and economic growth and it is with this in mind that AfDB has co-financed this public information centre.”
Officially opening the information centre, Mulongoti said there was need to balance between the socio-economic agenda and the political agenda in order to facilitate development.
“In Zambia we cherish politics and understand that only a civically enlightened population can drive successful development but the political agenda needs to be balanced with the economic and social agenda,” said Mulongoti.
“We in government believe that access to information brings about human transformation but until every Zambian understands his role in participating fully in the economy, we will not reach our vision 2030.”
AfDB Zambia manager Vivienne Apopo said the JDIC would help strengthen the bank’s objective of enhancing information access for the people of Zambia as part of the drive for facilitating the country’s progress in the information age.
“In order to cater for the information needs of differently-abled persons, the centre has provided suitable equipment and facilities to accommodate them,” said Apopo.
World Bank country manager, Dr Kapil Kapoor said shared information would enhance understanding, participation and would increase demand for accountability.
“Whether in dealing with a development project or broader economic reforms, significant efforts are being made to build consensus through raising of public understanding and generating well-informed dialogue between stakeholders on one hand and the development partner on the other,” said Dr Kapoor.
Labels: ADB, AfDB, JDIC, TRANSPARANCY
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AfDB Group commits $1bn to agriculture
By Joan Chirwa and Fridah Zinyama
Saturday June 07, 2008 [04:00]
KEY players in agricultural development have formed a partnership, with the aim of significantly boosting food production in Africa’s “breadbasket” regions. And the African Development Bank (AfDB) Group has committed an additional US$1 billion to its agricultural portfolio to help address the food crisis in its regional countries.
With small-scale farmers at the centre of the partnership agreement, Alliance for a Green Revolution in Africa (AGRA), the Food and Agriculture Organisation of the United Nations (FAO), the International Fund for Agricultural Development (IFAD), and the World Food Programme (WFP), signed a memorandum of understanding at the just-ended Food Summit in Rome, Italy.
The partnership is expected to link local food production to food needs, and work across Africa’s major agricultural growing areas or agro-ecological zones – to create opportunities for smallholder farmers, with Zambia being a potential beneficiary of the initiative.
The agreement marked a significant transformation in the way major global agencies work with smallholder farmers to assist them in solving Africa’s chronic hunger and food problems.
They noted that among the challenges facing accelerated food production in Africa were poorly developed markets, lack of investment and poor infrastructure in rural areas.
“This collaborative initiative is part of AGRA’s strategic vision to build partnerships that pool the strengths and resources of the public and private sectors, civil society, farmers’ organisations, donors, scientists and entrepreneurs across the agricultural value chain,” said Kofi Annan, chairman of the Board of AGRA. “We must implement immediate solutions for today’s crisis and do so in the context of a long-term concerted effort to transform smallholder agriculture, to increase productivity and sustainability and to end poverty and hunger.
The institutions stated that careful environmental monitoring and conserving biodiversity, water and land would be given high priority. The agreement also calls for coordinating and sharing agricultural development innovations across diverse ecological zones and associated crops. At the country level, the partnership will support the efforts of governments and work with farmers and other stakeholders to rapidly boost agricultural productivity and farm incomes.
Each agency will deliver unique expertise towards achieving an environmentally and economically sustainable green revolution that will end the continent’s perennial food crisis.
Per capita food production has declined in Africa for the past 30 years and farm productivity on the continent is just one-quarter the global average. Today, more than 200 million people are chronically hungry in the region, and 33 million children under age five are malnourished.
And in a press statement, AfDB president Donald Kaberuka said the additional funds would increase the amount set aside to mitigate the food crisis to about US$ 4.8 billion.
Kaberuka said the Bank Group would also restructure some of its agriculture portfolio to provide a rapid disbursement facility to the tune of US $250 million.
He urged cereals exporting countries not to suspend their exports because the practice would compromise the existence of about 150 million people in a dozen African states, especially the population of fragile countries, the sick and elderly.
Kaberuka explained that the Bank had a current portfolio of US $3.8 billion meant to help support the agricultural sector in its regional member countries.
He said that Bank would find a way of assisting countries in difficulties by considering additional measures for budget support.
The Bank Group's board of governors recently approved the establishment of the African Fertiliser Financing Mechanism Special Fund with a view to mobilising resources from donors to finance in particular, fertiliser production, distribution, procurement and use in Africa. And Kaberuka reiterated the importance of infrastructure in the resolution of the food crisis, considering that current average post-harvest losses stood at a whooping 40 per cent where a reduction of 10 per cent of the losses would result in five million additional tones of cereals.
He emphasised the development of rural infrastructure as one of the Bank Group’s priorities to open up landlocked areas to wider markets, attract great revenue for local farmers and drastically reduce post-harvest losses.
Labels: ADB, AGRA, FAO
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Zimbabwe denies having liquidated its debt with AfDB
By Kingsley kaswende in Harare
Friday May 16, 2008 [04:00]
ZIMBABWE has denied having liquidated its debt with the African Development Bank (AfDB) as claimed by the bank. A press statement pasted on the AfDB website indicated that Zimbabwe last month repaid US $700,000 it owes the bank despite its internal problems.
"In a bid to actively reconnect with international donors, the Zimbabwean government last month paid part of its arrears to the African Development Bank (AfDB) Group," the statement reads. "On April 14, 2008, the country paid US$ 500,000 to the African Development Bank and US$200,000 to the African Development Fund.
Zimbabwe has, in all, paid US$ 700,000 to the Bank Group despite numerous economic challenges currently facing the country, both globally and locally. According to Mr. Abdirrahmene Beileh, AfDB acting director in charge of southern African countries, 'Zimbabwe is still owing the Bank large amounts of money in arrears'."
But Reserve Bank of Zimbabwe (RBZ) governor Dr Gideon Gono denied having repaid AfDB, saying Zimbabwe still owed the bank.
“...As the country's central bank and custodian of government's foreign exchange receipts and payments, we wish to categorically state that to our knowledge, there has not been any such payment,” Gono stated yesterday.
He said Zimbabwe only made such a "surprise payment" to the IMF in the 2004/2005 financial year.
"If the country had such resources, the Reserve Bank would have prioritised the importation of grain (maize and wheat); the importation of fuel, electricity, medical drugs, industrial chemicals, fertilisers, seeds, water treatment chemicals, agricultural equipment, and other infrastructural development essentials, and of course leaving some for debt service," stated Gono.
Labels: ADB, DEBT, GIDEON GONO, ZIMBABWE
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RBZ sets the record straight on AfDB debt
Herald Reporter
THE Reserve Bank of Zimbabwe yesterday refuted claims that Zimbabwe had paid US$700 million debt to the African Development Bank. In a statement, which was widely quoted by the international media, AfDB had claimed that Zimbabwe had cleared US$700 million of its AfDB debt but the bank later reduced the figure to US$650 000.
However, RBZ said the Government had continued to raise foreign currency to support the economy but such efforts were still to result in multilateral and bilateral creditors taking over Zimbabwe’s debts.
"Although, as a central bank, we are closely working with the Ministry of Finance with several rods in the fire to raise foreign exchange resources to support the economy, such efforts have not as yet resulted in multilateral or bilateral creditors and/or donors disbursing funds or taking over our debts," RBZ Governor Dr Gideon Gono said in a statement.
On Monday afternoon, AfDB posted a statement on its website saying Zimbabwe had paid US$700 million of its debt to the bank and most news agencies wrote stories from the statement.
The Herald also picked the statement in which AfDB hailed Zimbabwe for being committed to meeting its international financial obligations despite the current economic problems caused by the illegal sanctions imposed by the West.
However, AfDB corrected the figures on the earlier statement late on Monday night.
In the correcting statement also posted on its website, the AfDB said Zimbabwe had last month paid US$500 000 to the bank and US$150 000 to the bank’s subsidiary lender, African Development Fund.
"Zimbabwe has, in all, paid 650 000 (US) dollars to the Bank Group despite numerous economic challenges currently facing the country, both globally and locally," the statement said.
Dr Gono said if Zimbabwe had such resources (US$700 million), the central bank would have prioritised the importation of grain (maize and wheat); fuel, electricity, medical drugs, industrial chemicals, fertilizers, seeds, water treatment chemicals, agricultural equipment, and other infrastructural development essentials and leaving some for debt service.
Labels: ADB, DEBT, GIDEON GONO, RBZ
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Sichinga calls for policies to safeguard local markets
By Florence Bupe
Tuesday May 29, 2007 [04:00]
FORMER Kafue member of parliament Bob Sichinga has called for the strengthening of industrial policies in Zambia in order to protect the local market against unbeneficial foreign investments. In an interview, Sichinga reiterated that there was need to ensure that the concerns raised at the recently held African Development Bank (ADB) meeting in China were addressed. During the meeting, ADB president Donald Kaberuka charged that China’s trade with Africa had continued to be one sided, with China benefiting more from investments in Africa.
“The views raised by African countries on unbalanced trade with China are very genuine and need to be seriously addressed. Actually, it is not only China that is exploiting the Africans, and Zambian markets in particular. All the super economies need to be scrutinised,” he said.
Sichinga, who is also an economist, said Zambia’s decision to rely on China for trade development was unwise, and advised that the country should put in more to ensure that there was mutual benefit from foreign investments.
“Many African countries, including Zambia, felt that they were disadvantaged by super economic powers like the US (United States of America) through certain trade agreements, but moving to China in a quest for trade developments is like moving from a frying pan into a flame,” he warned.
Sichinga said the government needs to come up with measures that would ensure mutually beneficial developments such as sustainable employment opportunities.
However, he emphasised that Africa as a whole, and Zambia in particular should not blame China for their economic policy shortcomings.
Labels: ADB, CHINA, LOCAL MARKETS, ROBERT SICHINGA
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China's lesson for the World Bank
By Jeffrey Sachs
Friday May 25, 2007 [04:00]
The China Daily recently ran a front-page story recounting how Paul Wolfowitz used threats and vulgarities to pressure senior World Bank staff. The newspaper noted that Wolfowitz sounded like a character out of the mafia television show The Sopranos.
At the same time, while the Wolfowitz scandal unfolded, China was playing host to the Africa Development Bank (ADB), which held its Board meeting in Shanghai. This is a vivid metaphor for today’s world: while the World Bank is caught up in corruption and controversy, China skillfully raises its geopolitical profile in the developing world. China’s rising power is, of course, based heavily on its remarkable economic success.
The ADB meeting took place in the Pudong District, Shanghai’s most remarkable development site. From largely unused land a generation ago, Pudong has become a booming center of skyscrapers, luxury hotels, parks, industry, and vast stretches of apartment buildings. Shanghai’s overall economy is currently growing at around 13 per cent per year, thus doubling in size every five or six years. Everywhere there are startups, innovations, and young entrepreneurs hungry for profits.
I had the chance to participate in high-level meetings between Chinese and African officials at the ADB meetings. The advice that the African leaders received from their Chinese counterparts was sound, and much more practical than they typically get from the World Bank.
Chinese officials stressed the crucial role of public investments, especially in agriculture and infrastructure, to lay the basis for private-sector-led growth. In a hungry and poor rural economy, as China was in the 1970’s and as most of Africa is today, a key starting point is to raise farm productivity. Peasant farmers need the benefits of fertiliser, irrigation, and high-yield seeds, all of which were a core part of China’s economic takeoff.
Two other critical investments are also needed: roads and electricity, without which there cannot be a modern economy. Farmers might be able to increase their output, but it won’t be able to reach the cities, and the cities won’t be able to provide the countryside with inputs. The officials stressed how the government has taken pains to ensure that the power grid and transportation network reaches every village in China.
Of course, the African leaders were most appreciative of the next message: China is prepared to help Africa in substantial ways in agriculture, roads, power, health, and education. And the African leaders already know that this is not an empty boast. All over Africa, China is financing and constructing basic infrastructure. During the meeting, the Chinese leaders emphasised their readiness to support agricultural research as well. They described new high-yield rice varieties, which they are prepared to share with their African counterparts.
All of this illustrates what is wrong with the World Bank, even aside from Wolfowitz’s failed leadership. Unlike the Chinese, the Bank has too often forgotten the most basic lessons of development, preferring to lecture the poor and force them to privatise basic infrastructure, rather than to help the poor to invest in infrastructure and other crucial sectors.
The Bank’s failures began in the early 1980’s, when, under the ideological sway of President Ronald Reagan and Prime Minister Margaret Thatcher, it tried to get Africa and other poor regions to cut back or close down government investments and services.
For 25 years, the Bank tried to get governments out of agriculture, leaving impoverished peasants to fend for themselves. The result has been a disaster in Africa, with farm productivity stagnant for decades. The Bank also pushed for privatisation of national health systems, water utilities, and road and power networks, and grossly underfinanced these critical sectors.
This extreme free-market ideology, also called “structural adjustment,” went against the practical lessons of development successes in China and the rest of Asia. Practical development strategy recognises that public investments – in agriculture, health, education, and infrastructure – are necessary complements to private investments. The World Bank has instead wrongly seen such vital public investments as an enemy of private-sector development.
Whenever the Bank’s extreme free-market ideology failed, it has blamed the poor for corruption, mismanagement, or lack of initiative. This was Wolfowitz’s approach, too. Instead of focusing the Bank’s attention on helping the poorest countries to improve their infrastructure, he launched a crusade against corruption. Ironically, of course, his stance became untenable when his own misdeeds came to light.
The Bank can regain its relevance only if it becomes practical once again, by returning its focus to financing public investments in priority sectors, just as the Chinese leadership is prepared to do.
The good news is that African governments are getting the message on how to spur economic growth, and are also getting crucial help from China and other partners that are less wedded to extreme free-market ideology than the World Bank.
Many African governments at the Shanghai meeting declared their intention to act boldly, by investing in infrastructure, agricultural modernization, public health, and education. The Wolfowitz debacle should be a wake-up call to the World Bank: it must no longer be controlled by ideology. If that happens, the Bank can still do justice to the bold vision of a world of shared prosperity that prompted its creation after World War II.
www.project-syndicate.org
Labels: ADB, CHINA, JEFFREY SACHS, World Bank
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100% profit externaliation suspicious - Magande/
By KASUBA MULENGA
GOVERNMENT has said it was suspicious of foreign investors who externalised all their profits. Minister of Finance and National Planning, Ng'andu Magande, said while Government allowed foreign investors to externalise their profits, it got suspicious when they did not leave any of their profits. He said in Lusaka yesterday that Government got suspicious with the externalisation of 100 per cent profits because it did not know where such investors would get the money from to continue with their operations. The minister said this when the visiting Malaysian investors paid a courtesy call on him at his office.
"Zambia is very hospitable to foreign investors. Any one is free to come and invest in any business and we do not care what they do with their profits except when they externalise 100 per cent of their profits," the minister said. Mr Magande said after getting out of huge debts following the completion of the Highly Indebted Poor Countries Initiative (HIPC), Zambia had reached levels where none of the parameters could threaten the country's economic performance.
He said inflation and bank interest rates had been lowered to better levels and that the country was now in a comfort-zone in terms of economic performance. Mr Magande said Zambia's foreign exchange regime had become one of the most open in the world and that Government was now working on tightening the management of financial institutions to create confidence in the sector.
He also told the team that despite not having its own airline, Zambia could still become the world's centre for communication particularly where investment opportunities were concerned.
And earlier, Mr Magande met the executive directors of the Africa Development Bank Group at which he appealed to the international financial institution to consider helping Zambia develop the entire agricultural sector. He also announced that the bank had given Zambia about US$3 million for feasibility studies on the construction of the Kazungula bridge. The minister said the bank had since 1971 committed itself to helping Zambia improve sectors such as transport, water, health, education and general infrastructure in various parts of the country.
He hailed the bank for its continued support to the development agenda of the Zambian Government since its establishment which had to date committed about US$900 million. Mr Magande said the bank was also supporting some development projects in Zambia like the rural water and sanitation in Central Province and the Agriculture Sector Investment Programme in Eastern Province.
Others include the small scale irrigation project, agriculture marketing and processing project as well as the Lake Tanganyika Integrated Regional Management Programme. The minister said once completed, the Lake Tanganyika project would raise living standards of the people who live around it and result in ending conflict among them.
He also thanked the bank for having written off about US$387 million, which Zambia owed. Mr Magande however urged the bank not to give more funds to Zambia when it asks for more if the savings from the debt write-offs were not put to good use.
And bank's executive director for Belgium, France and Italy, Francesco Pittore, said the financial institution would ensure that it opened an office in Zambia to improve interactions with Government.
Labels: ADB, MAGANDE
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