Zambia loses donor funding due to rising graft

LUSAKA – Zambia has lost over US$600 million in donor funding due to rising corruption, forcing the government to make budget cuts, the country’s finance minister said Friday.

Situmbeko Musokotwane told lawmakers that pledges of kwacha 2,8 trillion (about US$604 million) in budget support and development assistance have been suspended.Financial mismanagement in the public sector ‘has dented the reputation of many in this government,’ he said at the presentation of his 2010 budget.Musokotwane unveiled a budget of about US$3,6 billion that proposes to increase government’s domestic borrowing and general taxes to about US$3 billion.The copper-rich southern African country has been rocked by a series of corruption scandals, and President Rupiah Banda is under pressure to be tougher against graft.A number of government officials have been arrested in connection with the alleged theft of about US$6,5 million in state funds.The acquittal of former President Frederick Chiluba on corruption charges has also angered many Zambians.Musokotwane acknowledged that the withholding of funds has ‘jeopardised progress’ made by the government. He did not specify who the donors were.The money was supposed to help build schools, roads and hospitals. Funds will have to be diverted from elsewhere so such projects can be completed, he said.’It is imperative that we do not lose ground which we have attained,’ Musokotwane said.Despite economic reforms, 20 per cent of Zambia’s 12 million people are unemployed and the majority live below the poverty line.The country, which has earned praise for its market-friendly policies, has been hard hit by the global financial crisis. The price of copper, which gives the country 70 per cent of its hard-currency revenue, has plummeted and hundreds of jobs have been lost.Musokotwane said several meetings were held with donors after aid was suspended and a plan to ensure tighter control over state coffers was agreed on. This includes more resources being allocated to the office of the auditor-general and the anti-corruption commission, he said.-Nampa-AP