Suspected misuse of funds by the government investigated in Zambia

Suspicions concerning misuse of funds by the central government exacerbate the situation in Zambia. Juha Savolainen, Director of the unit responsible for cooperation between Finland and Zambia, reports on the situation.

Juha Savolainen, what is happening in Zambia?

“Questions concerning the misuse of public funds have been raised in several government sectors in Zambia. The investigations currently under way concern the education, health and social sectors. Of these, the social security sector is of particular interest for Finland, as we have provided financial support for the development of the social transfer systems in Zambia.

We are monitoring the situation with concern. Cooperation between Finland and Zambia has continued for a long time, and many signs of positive development have been seen in the country in recent years. As an example, the Zambian economy has grown by some 3 to 7 per cent annually over the last ten years.”

Did the problems come as a surprise?

”The development in Zambia has been a cause for disappointments in the last few years. The country’s political situation is dominated by a sharp juxtaposition between the government and the main opposition party, and it appears that the country is already focusing on a power struggle while preparing for the elections in 2021.

Corruption and high public debt are tell-tale signs of problems in the Zambian government.  Corruption scandals have become increasingly common and public. Leading politicians have been dismissed, or they have stepped down due to suspicions of corruption in the government.”

Are these problems relevant to the cooperation between Finland and Zambia?

“Of the current problems, the suspected misuse of funds in the social security sector has the most direct relevance to Finland. Finland supports the implementation of Zambia’s national social protection policy as part of development cooperation between the two countries. This work is funded through the Social Cash Transfer Programme and the UN’s Social Protection Programme. It has now transpired that some of the aid distributed through the Social Cash Transfer Programme has not reached households. Responsibility for implementing the programme rests with Zambia’s Ministry of Community Development and Social Welfare.

In a broader context, problems of this type and a more difficult operating environment will naturally also affect our other work and our possibilities of collaborating with the Zambian government.”

What will Finland do now? 

“Finland has suspended its aid to the Social Protection Programme and announced that funds paid earlier must not be used for the programme’s needs. The suspicion and the amounts involved are being investigated in cooperation with Sweden, Ireland and the United Kingdom. The responsibility for investigating any actual offences belongs to the competent Zambian authorities, and Finland will support their work.

Support from Finland has been paid into the same basket as aid from other donor countries and also Zambian budget funding. Zambia has contributed two thirds of the programme's costs. ”

Does this suspicion mean that all the aid money has been squandered?

“No, it does not. The aid has succeeded in strengthening the social protection of the poorest households in Zambia. The programme has benefitted the poorest and most vulnerable households in the country, especially women and girls.

This programme, which has continued for some four years, has reduced poverty in its target areas. Direct transfers of approximately EUR 10 in value have been directed at selected deprived families. Social protection helps people get through the toughest times when they lose their jobs or their crops fail. Aid has been given to the weakest, poorest and most excluded people with an urgent need for safety networks.”

Problems associated with the aid programme for farmers were also uncovered earlier. What is the situation of this investigation now?

“As agreed, the Zambia National Farmers’ Union returned the first instalment of funds found to be misused in the spring. At the moment, a schedule on which it could manage the rest of the repayments is being discussed.”

Will this situation have wider impacts on continued cooperation between Finland and Zambia?

“In cooperation talks last year, Finland and Zambia agreed that bilateral development cooperation will be phased out and the relationship between the two countries will be developed in a more multilateral direction. In other words, traditional development cooperation will be replaced with other types of collaboration, mainly commercial.

During a transition period, Finland will continue to support private sector development in Zambia. This will lay the foundation for more extensive economic cooperation in the future. Support for private sector development will not be channelled through the systems of the Zambian government.”