World bank to lend Zambia $210 million as country targets to double CDF to K56m per year.
The World bank under the Zambia Devolution Support Project will fund the Zambia government as the country targets to double the Constituency Development Fund – CDF allocation from the current K28 million (about $1.5 million) per annum to about K56 million (about $3 million) per annum from 2024.
According to the World Bank Zambia Devolution Support Program document made available to the Zambian Business Times – ZBT, the funds International Development Association – IDA has proposed to give the Zambian government a loan of $210 million to support the devolution Programe from 2023 to 2026.
The World bank in supporting the Zambia Devolution Implementation Plan – DIP noted that Zambia has high reliance on the copper mining sector and follows a path of extractive based growth.
“Zambia has a large rural – urban economic divide with high territorial inequities. Zambia though stable is characterized by weak governance, weak institution and limited accountabilities that has resulted in distorted policies and public resource allocation”.
CDF looks like an area that the new dawn administration will need to tightly manage to ensure that it delivers especially for the rural constituencies. Raising it from K1.6milllion which his predecessor left it at to initially K25 million was already a big jump, taking it to K56 million would be yet another milestone, abait financed via more debt contraction.
A check by ZBT with some legislators however review that CDF has serious limitations when it comes to urbanized and densely populated constituencies that need millions of dollars per annum to make meaningful and impactful investments such as roads and housing.
With the current common place complaints about economic hardships that is exacerbated by the high cost of living and a depreciation currency, decentralisation plan seems to be one of the few notable success areas that the new dawn administration has managed to make a visible mark and this may well be their legacy if well implemented over the successive years to follow
As for national Debt resolution, the nation has now entered June 2023 with no clear roadmap or novel ideas of how to get the restructure deal closed soonest. Zambia’s Finance Minister Dr. Situmbeko Musokotwane insists that there is no other way out, no plan B to the current route that has been taken but time has continued to run out as negotiations drag on.
Some economic and finance experts have challenged President Hichilema not to put all eggs in one basket but to seek a plan B or embark on an alternative and innovative economic solution in the event that the curent global geopolitics (West Vs East) delay the IMF and Western backed debt restructuring process.
Calls have also been made urging the new dawn administration to either reverse some tax incentives that are currently losing the treasury about $200m annually (about $1 billion in five years) or get time bound guarantees by the mining companies that are benefiting from the current incentive which promised huge investments in exchange.
Source; Zambian Business Times
LOAN
The Senate has set up an ad hoc committee to carry out investigation into the alleged uneven disbursement of half a trillion naira loan to the six geo-political zones by the Development Bank of Nigeria (DBN).
The resolution was sequel to a motion moved by Mohammed Ndume (APC-Borno) and co-sponsored by Ibrahim Bomai (APC Yobe) during Wednesday’s plenary.
The committee is to be chaired by the Chairman of the Senate Committee on Banking, Insurance and other Financial Institutions, Sani Musa.
Other members of the committee are Ibrahim Danbaba (PDP-Sokoto), Ayo Akinyelure (PDP-Ondo), Matthew Urhoghide (PDP-Edo), Uche Ekwunife (PDP-Anambra), Sadiq Umar (APC-Kwara) and Mr Ndume.
The committee has two weeks to submit its report to the Senate. The upper chamber also urged the bank to ensure the equitable disbursement of the loan in all the six geographical zones of the country. “We urge the bank to expand its loan facilities beyond the five sectors already captured,” he said.
Moving the motion, Mr Ndume said that the top five sectors considered for the loan were Oil and Gas (42.0 per cent), manufacturing (16.0 per cent), agriculture, forestry and fishery (7.2 per cent), trade and commerce (6.3 per cent), and transportation and storage (3.5 per cent).
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He alleged that there was a huge disparity and uneven disbursement of half a trillion naira loan to the six geo-political zones and states in the country in 2021 by the DBN.
He mentioned Lagos as the major beneficiary with 47 per cent of the total loan while the entire northern region got 11 per cent.
The lawmaker said: “The bank’s Annual Integrated Statutory Report 2021 obtained on July 13 from the organization’s website indicates that the bank was able to disburse a loan worth N483, 000, 000, 000 only out of which only 11 per cent went to the 19 states of northern Nigeria while 47 per cent went to Lagos alone.” deputy senate president, Ovie omo agege, who presided over plenary, with the support of the senators, unanimously adopted the motion.
SOURCE: Premium times
ResponsAbility Investments AG Signs Sh606.6 Million with AGF to insure loan to Small Businesses
Impact investor responsAbility Investments AG has signed a deal worth Sh606.6 million ($5 million) with African Guarantee Fund (AGF) to insure loans issued to small businesses.
The facility will increase lending to women-owned agribusiness as well as climate-focused businesses involved in energy efficiency, renewable energy, natural resource management and climate insurance.
AGF loan guarantee now enables responsAbility to issue loans to SMEs without worrying about loan defaults.
In Kenya, agri-SMEs sub-sector face numerous challenges such as access to finance, talent, and the ability to attract and retain qualified employees, hindering them from achieving their full potential.
Others are an ecosystem of support and collaboration between public, private, and financial players; access to knowledge that strategically supports development; and access to markets, including information, connections with suppliers and clients, and physical infrastructure.
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“Agri-businesses tend to have higher risk profiles and limited cash flow compared to equivalent SMEs in other sectors. Our risk-sharing partnership will allow responsAbility to scale up lending activities to agribusinesses across Africa enabling agri-SMEs to play a bigger role in connecting different components along the food production value chain,”
“This partnership demonstrates our commitment to African SMEs and to the continent’s sustainable development by supporting the growth of agri-SMEs, increasing their productivity and enabling them to adapt to the changing environment,” AGF Group CEO Jules Ngankam said.
The partnership will play a critical role in bridging an estimated Sh89.8 trillion ($74 billion) annual financing gap facing Agri-SMEs in sub-Saharan Africa.
“This partnership reflects the alignment of our values in fostering a sustainable agricultural sector. Additionally, it shares our vision of Africa’s key role in future global food production,” responsAbility Kenya and Head of Financial Institutions Debt Africa Country Director Michael Fabbroni said.
SOURCE: Capital business