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Govt blames failure to service AfDB loan on weak kwacha

THE government says the delay to settle the US$1.4 million to the African Development Bank was due to the sudden depreciation of the kwacha, which increased the volume of the kwacha needed to settle the amount.

According to a statement from the Ministry of Finance public relations unit, the payment of the outstanding US$1.4 million to the African Development Bank would be finalised as soon as possible.

Government said it must be understood that the government budget was always in kwacha and if there is a sudden and significant adjustment in the exchange rate, the Ministry of Finance may experience challenges in meeting obligations payable in foreign currency.

“This is normal and may occur from time to time. The government wishes to assure the nation and all other stakeholders that the situation is under control and is not as portrayed on social media,” the ministry stated.

The government said the information circulating on social media to the effect that the AfDB had put Zambia under sanctions for failing to repay loans, should not cause panic.

“Government acknowledges that the African Development Bank Group did write to the Ministry of Finance yesterday 23rd December 2019, to inform the ministry that, as of yesterday 23rd December 2019, the Bank had not received full payment in respect of Bank Group Bills. The Bank Group added that, in accordance with the Bank Group Policy on Loan Arrears Recovery, it wished to inform the government that sanctions had been imposed on 15th December 2019. It was further stated that the Bank Group counted on government’s prompt action for the timely settlement of the amounts due to enable the lifting of sanctions,” it stated. “The position of government on this matter is that payment of the outstanding amount of US$1.4 million is being processed and will be finalised as soon as possible. The delay in the settlement of the bill was due to the sudden depreciation of the kwacha, which increased the volume of the kwacha needed to settle the amount.”

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