MIKALILE LOANS
By Amb. Emmanuel Mwamba
The government has been engaged on debt restructuring process since 2019.
The Ministry of Finance has just completed the negotiations for both the $6.3 billion with China and the Paris Club, and the $3billion with Eurobond.
Government is expected to now engage and complete the debt restructuring process with commercial creditors.
Mikalile Trading of Hong Kong is among those foreign and commercial creditors the Ministry of Finance is expected to negotiate with.
Apparently, it is for this reason that a special audit has been conducted on the $470million that Governmeny owes Mikalile Trading Company of Hong Kong.
Similar to Chinese loans that were off balance sheet under project finance, Mikalile’s loan is under Supplier Credit Agreement which is an agreement in a commercial contract under which an exporter will supply goods or services to a foreign buyer on longer credit terms.
But what strikes you immediately is the question;
- How come the Auditor General has not audited the loans under Project Finance of $6.3billion of roads, bridges, schools, hospitals, airports, dams and power stations, loans mostly from China?
- Why hasn’t the Auditor General audited the Euro Bond loans? (I notice that a tiny component of Eurobond involving allocation of $120 million to Zambia Railways and some State-Owned Enterprises, has been scratched).
- Why do a special audit to target Mikalile Trading Company only?
The Zambian Government entered into two loan agreements under Supplier Credit Agreement with Mikalile Trading of Hong Kong;
- $69million to supply police uniforms, anti-riot gear, traffic kits and police equipment under the Ministry of Home Affairs,
- $401million to supply school design, technology equipment, laboratory kits, school furniture, computers, carpentry toolkits under the Ministry of Education.
Mikalile Trading has dismissed assertions that equipment were not delivered or were over priced as over 10,000 schools benefited from the project.
On the uniforms by the way, ZNBC claimed that only $4.5million uniforms and material were delivered out of a contract sum of U$70million.
LIES, LIES.
But the audit report shows that out of a total of US$69,896,630.23 only items valued at $4,555,718.09 have allegedly not been delivered.
This means that items worth $65,340,912.14 have been delivered.
Muli ko no bufi sana in the reporting.
I will do a comprehensive look at the claims of the audit and documents available for comparison.
By the way, Ministry of Finance approved the loans and under the Zambia Joint World Bank IMF Debt Sustainability-Analysis, Mikalile’s loans were reported to the IMF, who confirmed and verified the loans and their delivered components…
It must be noted that Government has defaulted on these ten year loans whose service repayments must have started in December 2021.
The question remains, why target and audit Mikalile Trading loans worth $470million out of loans contracted of $14.3billion?
And on overpricing , do you know that we have so far paid over $3.5billion on the Eurobond loan service alone before we clear the principle sum of $3billion?
Remember in the recent Eurobond $3billion negotiations, it was revealed that $810million was reported as outstanding interest, unpaid since December 2020?
The Grammy for playing victim goes to Emmanuel Mwamba. Mikalile can answer for himself, he is a grown arse man. What is disturbing is your very special intetest in this matter. Were you also a beneficiary? Please tell us, because there is a clear and documented interest in the matter.