After making so much noise about the PF government successful issue of the inaugural entry on the international capital market in September last year and raised US$750 million, it has since emerged that the money is till lying unused at Bank of Zambia and various banks in Zambia.
Sources at the Ministry of Finance and Bank of Zambia disclosed that the only money that was paid was arrangement fee to foreign firms while the rest of the money is still lying but accruing interest to the lenders everyday while it loses value in Zambia.
According to sources, the money came in US dollars but most banks could not accept to keep in dollars because the statutory instrument banning use of dollars. As a result, the Zambian government off-loaded it onto the market to cushion the free falling Kwacha and kept the money in Zambian Kwacha.
But this money has remained unutilised in the country despite the many pressing issues in the country such as road infrastructure.
And to avoid keeping a big chunk of money, the Zambian government even decided to lend part of the money to the banks at a loss than the interest value they were charged.
What is even worse is that Zambian firms also want to borrow from the capital market even before the earlier money by the Zambian government has been utilised.
For example, Zesco announced plans to borrow US$2 billion from investors in Britain and the US to expand power generation, while Road Development Agency (RDA) is looking to issue a US$1.5 billion bond for road projects.
Zambia Railways wishes to borrow US$500 million bond as well as the Lusaka City Council also looking for US$500 million bond.
Sources said there is a lot of uncoordinated planning by the PF government as each entity seems to operate independent of the other or indeed independent of the state.
“At the time of borrowing US$750 million Finance Minister Alexander Chikwanda said the money would be for roads, Zesco power generation, railway infrastructure and other capital projects but individual firms in these sectors also want to borrow for the same projects while the other money is still lying idle but accruing interest,” sources said.
Recently, World Bank urged the Government to quickly and effectively spend the proceeds from the Eurobond on productive projects which will bring about growth and employment opportunities.
World Bank country director, Zambia Malawi and Zimbabwe Kundhavi Kadiresan said carrying on the proceeds from the Eurobond without using it would cost Government a lot of money per year, hence the need to speed up the plan for their absorption.
Finance Deputy Minister Miles Sampa had said the government was capable of paying back US$750 million Eurobond debt because the infrastructure development it would invest the money in are viable.
Mr Sampa said the proceeds from the Eurobond would be utilised on promoting infrastructure projects that would consequently increase economic activities and generate taxes.