Depreciating Kwacha hurting external obligations

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money_imageTHE MINISTRY of Finance has complained that the depreciating Kwacha is hurting external obligations which included paying Zambia’s diplomats and debt servicing.
And the ministry says it will not hesitate to recall idle public funds being kept in commercial bank accounts.
Last month, the Treasury released K1.6 billion, predominantly into capital projects, poverty reduction and employment creation activities as part of the implementation of the 2014 national budget.
Among the salient expenditures of the Treasury last month included

the equivalent of K342.8 million for foreign currency purchases, of which an equivalent of K307 million about US million went towards repayment of arrears owed to PTA Bank for fuel purchases, K35 million was shipped to Zambia’s foreign missions for staff emoluments, and K1.8 million was a scheduled external debt amortisation.
“These transactions had a tow on the exchange rate, however, foreign exchange demand is expected to taper-off this week,” stated Treasury.
Treasury also injected K165 million from the US$1 billion sovereign bond towards recapitalising Zambia National Building Society.
“These funds have significantly improved the resource base for ZNBS and we anticipate improved onward lending to the public as mortgages in form of home purchase loans, construction loans, home improvement loans, and loans under employer-assisted schemes,” according to Treasury.
And secretary to the Treasury Fredson Yamba threatened to allocate funds lying idle in commercial banks to needy areas and sectors.
Yamba, however, did not indicate how much money from government ministries and spending agencies was currently lying unutilised in commercial banks.
Yamba said the Treasury wanted to see that public funds were utilised for intended purposes.
“We must not wait for the next rains to catch up. Therefore, the Treasury will not hesitate to recall idle funds being kept by some ministries in commercial bank accounts, for re-allocation to needy programmes,” Yamba said. “We also want to see that public funds are utilised for intended purposes. In doing so, we will be assured of results that are beneficial to the people of Zambia and reassuring to the regional and international community about our ability to transform the Zambian economy into one of the best in Africa.”
He said there was need to ensure that the released funds are implemented expeditiously before the commencement of the rainy season.
“At all levels of governance, it is also important that everyone familiarises themselves with the statutes, regulations and guidelines on management and administration of public funds to ensure that the intended beneficiaries are touched by these resource outlays, in a timely, positive and sustainable manner,” said Yamba.

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