Where did Euro Bonds money go ?

Where did Euro Bonds money go ?

Gregory Cifire writes:

In 2012, Zambia got $750m, in 2014 $1bn, and $1.25bn in 2015, giving a total of $3bn in the recorded short period, aside other debts. It is clear that the Euro bond was used to Finance government consumption.

What has Zambia Railways done with the $120m, Zesco got $255m, DBZ $20m to support small and medium enterprises. Others include Ministry of Health which got $29m for the modernization of the University Teaching Hospital, Livingstone General Hospital, Kitwe Central Hospital and Ndola Central Hospital while the Road Development Agency (RDA) was given US$310m.

From the figures given above, the total goes only to $734m, covering on the first Eurobond.
May these institution give an account on how they have used this money? We have not seen any single improvement at Zambia Railways or Zesco. These institutions are in worse off situations than they were before injection of the Eurobond. These Institutions are supposed to pay back the bond. That’s how normal business goes.

DBZ has been the most depressing institution in Zambia. For whose benefit does DBZ exist? Which small scale businesses benefited from the $20m, and when did they start paying back the loan so that DBZ makes own contribution towards the repayment? Zambians deserve to know.

Seriously, Government must explain to the citizens how the Euro bond money was used? Please avail us the information on how the over $2bn was used. This is Public debt and we deserve to know because it is us the people paying, albeit without our consent.

In 2017, a Permanent Secretary (PS) at Ministry of Finance announced that Zambia will begin refining the Eurobond in 2019. Could this be the reason why we have seen delays in payment of salaries, removal of student meal allowance, and failure to honor FISP obligations, among others?

I shudder to imagine what will happen in 2022 and beyond when we start paying back the Euro bonds. Mind you in a single day, Zambia will repay $750m in 2022 and $1bn in 2024. The third Euro bond issued in 2015 has a different structure, amortized in three equal installments between 2025 and 2027. We need to brace ourselves for tougher times ahead.

In the absence of proper explanation, Zambians will believe that the bulk of the Euro bond was used without plan. Individuals benefited from this money. Yet it is the poor Zambians that will suffer. In order to cover their backs, perpetrators of the plunder of the Euro bond pushed it into infrastructure development such as roads.

There is no much argument about whether Investment in Infrastructure is necessary (Zambia’s infrastructure lags that of her peers in SADC and it is also important for growth), but there has been concern about whether the right projects have been selected and whether value for money has been achieved. In the recent past, we have seen recently built roads and bridges being washed away.

For Zambian roads, the median cost of construction and upgrading of paved roads under 100km is US$457,000 per km per lane, and for roads over 100km, the median cost is US$360,000. As compared to the median cost of paving roads in the region, Zambia’s roads stand out to be the most expensive.

Whoever cares to explain, we demand answers. It is not your money. It is our money.

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