Melo News | Wednesday, April 24, 2024 | Lusaka
A thorough examination of the country’s external debt has uncovered significant financial discrepancies and irregularities. These include conflicting figures, overpricing, and weaknesses in the process of contracting debt. The audit covers the financial years from 2006 to 2022, providing a comprehensive overview of the situation.
One of the key findings of the audit is the presence of weaknesses in the contracting of external debt. The government has signed seven contracts, totaling over 958 million dollars, to finance various projects between 2014 and 2019. This raises concerns about the transparency and effectiveness of the debt contracting process.
Furthermore, the audit report highlights notable discrepancies in specific contracts. For instance, the contract for the supply of school requisites between the Ministry of Education and Mikalile Trading Company, valued at 402 million dollars, was found to be overpriced by 60 million dollars. Additionally, the interest that was supposed to be over 78 million dollars was pegged at over 138 million dollars. These discrepancies raise serious questions about the integrity of the procurement process.
Another concerning revelation pertains to the contract for the supply of police uniforms and riot gear, amounting to 70 million dollars. The audit report reveals that the supplier was paid despite not delivering items valued at 4.5 million dollars as of January 31, 2024. This raises concerns about the accountability and oversight in the Ministry of Home Affairs and Internal Security.
Acting Auditor General Ron Mwambwa, who released the report, highlighted the alarming increase in Zambia’s external public debt. It has risen from over one billion dollars in 2006 to a staggering 14 billion dollars in 2022. Furthermore, from 2014 to 2020, the country experienced a significant increase in external public debt stock, reaching 70 percent of GDP. However, there has been a slight reduction in 2022, bringing the debt stock down to 49 percent of GDP.
Dr. Mwambwa explained that the lengthy audit period was necessary to establish an accurate and verified position of the national external debt. This was crucial in light of the conflicting figures and to analyze borrowing patterns over the years. The audit aimed to provide a comprehensive understanding of the country’s debt situation.
These findings were communicated to the media through a statement released by Ellen Chikale, the Head of Public Relations at the Office of the Auditor General. The statement emphasizes the importance of addressing the identified discrepancies and weaknesses to ensure transparency and accountability in the management of the country’s external debt.
Get your hands on the comprehensive report by clicking on the link https://www.ago.gov.zm/?wpfb_dl=300 and downloading it.
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