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About Big Ideas of Development, the Case of the Infrastructure Fund

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By Amb. Emmanuel Mwamba

Part IV

It’s in 2017.

The Industrial Development Corporation (IDC)of South Africa CEO came to our Pretoria Office.

Through his office, we had facilitated the provision of the $20million line of credit for small and medium-scale businesses in Zambia.

The Development Bank of Zambia(DBZ) was identified as the institution to manage the Fund.

“It’s been one year and DBZ has not taken up the fund!” disclosed the IDC representative.

This is one frustrating feature I have consistently witnessed and faced in Zambia, where the bureaucratic system hampers, stalls or literally kills development initiatives and projects.

How can a country with an army of young entrepreneurs, crying for capital funding, fail to accept, absorb and disperse such a $20 million fund availed on a silver platter?

Imagine how many entrepreneurs such a fund could help!

And this was with the background that in the last few months prior, infrastructure projects began to stall in Zambia, as more and more new ones, some commissioned by the Head of State were being shelved, and the debate about the rising foreign debt associated with the construction of infrastructure, took centre stage.

Recognizing this economic environment, I tried hard to leverage on the funding available from the South African Government, its agencies and its private sector financing infrastructure that exists for trade and infrastructure development.

For example, I met the CEO of Export Credit Insurance Corporation of South Africa (ECIC), whose agency provides export credit funds.

I wanted the ECIC to be linked to Zambia’s local suppliers of equipment to the mines, to use the credit lines and overcome the lack of funds that beset them on big supply orders.

“Sir, let us pursue the Infrastructure Fund, it’s a novelty idea we are exploring and Zambia could be the first country to benefit from it,” advised the IDC representative.

South Africa commits up-to 30% of its own resources annually, to the development of regional initiatives such as continued development of transport corridors and its infrastructure, provision of trade and export credit lines.

Other initiatives support industry performance aimed at promoting their export trade.

We had just inaugurated the Bi- National Commission (BNC) between Zambia and South africa.

Besides the usual trade issues that the BNC is preoccupied with, we decided to use the state-to-state vehicle to achieve and institutionalize these funding mechanisms.

Then came an innovative Minister of Finance who was a wonder to watch as he pursued the agenda aggressively and overcame many hurdles.

THE INFRASTRUCTURE FUND IS BORN

Infrastructure is a crucial driver of economic growth.

As government resources face competing needs from social and other sectors,
Governments worldwide have turned to the private capital market for financing infrastructure and have collaborated with the Public-Private Partnerships.

There is a huge stock of private capital that is available out there, while public financing
continues to dwindle, or is limited or insufficient to meet the country’s infrastructure deficit.

Instead of acquiring traditional sovereign loans or direct financing, the mechanism is different and is based on the understanding that the private financing provided, will be recovered directly through user charges as they provide protection to the investor.

We were targeting the first funding to concentrate in commercially attractive sectors.

I shared the idea with the Minister of Finance, Felix Mutati. He was on his way to Washington.

Hon. Mutati was not your ordinary Minister of Finance. He was highly innovative and was always attracted to new ideas.

He was also keen to resolve and unlock bureaucratic bottlenecks that hinder or delay developmental initiatives.

Upon his return a few days later, he had good news.

“I have spoken to my counterpart from South Africa”.

“The Infrastructure Fund idea is brilliant. We are setting it up”, he said to my amazement at how quick an idea was being realised.

“Proceed to set up the meetings with South Africa Treasury, I will travel back here with my team”, he said in his usual way of simplifying technical matters.

We started the process in earnest and before long, our technocrats from Zambia and South Africa governments and associated agencies began to meet.

Hon. Mutati also visited South Africa twice to give impetus to the process.

THE INFRASTRUCTURE FUND MODEL

The model was based on creating a Basket Fund in Zambia, independent of the national budget, but dedicated to building and supporting infrastructure development.

The Fund would attract investment from Zambian, South African and other international institutional investors, such as pension funds, long term insurance companies, sovereign wealth funds and collective investment schemes.

The subsequent meetings were fruitful and various drafts of Memorandum of Understanding (MOUs) were prepared and ‘flew’
between our capitals for our government lawyers to resolve.

We had gathered development, financial and pension institutions as the core group to raise the initial funds for the basket.

We were also concerned with the outstanding or stalled projects in Zambia and the initiative raised pledges of $1.1billion to complete these projects.

The Development Bank of South Africa’s (DBSA’s) Project Preparation Unit (PPU) team, were given the mandate to explore ways of delivering on the projects quickly.

The MOU included the Ministry of Finance of South Africa, Ministry of Finance of Zambia, the Development Bank of South Africa(DBSA), the Public Investment Corporation(PIC), Land Bank, Airports Company South Africa, Industrial Development Corporation-South Africa, Industrial Development Corporation-Zambia, the Public Private Partnership Unit-South Africa, Zambia Railways Limited and Transnet.

We also created sector-specific sub-committees to drive the areas of their interests such as the agro-processing sector.

A second MOU was prepared to be signed between Zambia and South Africa to strengthen the Infrastructure Fund MOU among the various funding parties in Zambia and South Africa.

CONCLUSION

Despite the sourcing and provision of $1.1billion as seed money for the Infrastructure Fund, the bureaucratic process to legally establish it rolled extremely slow.

And as it sadly happened, both Ministers of Finance in Zambia and South Africa were replaced.

The establishment of the Infrastructure Fund lost momentum.

We tried hard to ensure that it obtained the same traction but new priorities appeared to have overtaken the drive.

Despite the approval of two final draft MOUs, the signing has not taken place.

In sharp contrast, in his 2020 address to Parliament, President Cyril Ramaphosa announced the establishment of the Infrastructure Fund to quicken the drive to develop infrastructure in South Africa.

I kicked myself!

How can a good development idea we started in 2017 fail to take root but be established and celebrated elsewhere?

Have we missed the golden opportunity to deliver infrastructure development using other innovative mechanisms? It is yet to be seen.

As it is, there is a moratorium on new infrastructure projects, contraction of new loans and government is implementing austerity measures.

It is in this environment that the Infrastructure Fund would have thrived well to continue to deliver development to our country.

END

About the Author

He served as Permanent Secretary in Northern, Eastern and Western Provinces.

He was also Permanent Secretary at Ministry of Information and Broadcasting Services.

He also served as Zambia’s High Commissioner to South Africa.

He is currently the Zambia’s Ambassador to Ethiopia and Permanent Representative to the African Union (AU).

Lifestyle

South African Award-winning Rapper AKA’s Fiancee dies in a Cape Town hotel tragedy

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Tragedy has truck AKA and the Forbes and Tembe families as his Fiancee, Nelli Tembe, jumped off the 10th Floor of the luxurious Pepperclub Hotel in Cape Town this morning and has sadly passed away. Police have opened an investigation into the death and events that took place at the five-star Hotel.

Kiernan Jarryd Forbes, known professionally as AKA, is a South African rapper, singer, songwriter, record producer and entrepreneur. Born and raised in Cape Town, Western Cape, Forbes gained significance after releasing his single “Fela in Versace” which was a global success and is widely considered one of the most successful and talented Hip-hop artists to come out South Africa.

The Sunday World broke the news that AKA’s fiancee, whom he engaged 2 months ago, had battled depression and allegedly committed suicide by jumping off the skyscraper building in Cape Town’s CBD. It is reported that AKA is not taking the death of his fiancee well, and is surrounded by close friends and relatives.

News of his engagement went viral on Social Media as it was announced that AKA had paid “Lobola” for Nelli Tembe and the death has come as a shock to the Forbes and Tembe families and a statement from both families is reportedly to be issued soon.

In a post on both Instagram to his 2.8 million followers and Twitter to his 4.8 million followers, the popular Rap Artist shared a picture of Nelli Tembe’s hand with a ring on her finger on the 22nd of February 2021. The caption read: “21/02/21 – love of my life said Yessss”.

A video posted on Twitter shows the General manager of the Pepperclub hotel, Efi Ella saying that he got a call around 7:30am that they was an incident and the Police were called immediately.

“It is a young girl, aged 22. At this stage the Police are still investigating.”

“Paramedics on scene have said a female had allegedly jumped from the 10th floor of that building. When paramedics arrived on scene, she had sustained polytraumatic injuries,” Netcare 911 spokesperson Shawn Herbst said.

“She was in a critical condition and they started a full life-support resuscitation. Unfortunately her injuries were too severe and she was declared deceased,” he added.

Western Cape’s SA Police Service Media Liaison, Captain FC van Wyk has said crime-scene experts were looking for clues at the hotel.

“Cape Town Central police are investigating an inquest case after an incident at a hotel this morning at about 7.45am on the corners of Loop and Bloem streets, Cape Town CBD, where the body of a 22-year-old woman was found deceased,” the police said in a statement.

It is alleged that AKA was in the hotel with Nelli Tembe prior to the tragic event that took place. This is a developing story and more news to follow as the investigations are carried out.

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International

Zambian truck driver who was shot in South Africa dies

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A 37 year old Zambian Truck driver who was shot at by unidentified people at Beit bridge border in South Africa has died.
Stephen Nansowa died at a Hospital within Limpompo province where he  was receiving medical treatment for gun shot wounds.
Zambia’s High Commissioner to South Africa Major General Jackson Miti confirmed the death of Mr. Nansowa.
He said arrangements were being made by his employers to repatriate his remains to Zambia.
General Miti has since wished the bereaved family God’s strength during this difficult time.
Mr. Nansowa was few weeks ago attacked and shot at by suspected criminals while in his truck waiting to be cleared by customs at the border.
The matter was reported to local Police who instituted investigations but no arrest has been confirmed so far in connection with the attack.
This is according to a press statement issued by Mrs Naomi Nyawali, First
Secretary Press and Public Relations at Zambia High Commission in South Africa.

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Lifestyle

Ndola Police arrest teen “vampire” girl

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A THIRTEEN-year-old girl of Ndola has lodged in a strong bid for the title of ‘Zambia’s Most Bizarre Crimes’ after she turned into vampire and sank her teeth into the privates of a 4-year-old girl she kidnapped.

With names withheld due to the age of both the offender and victim, Copperbelt Police Commissioner Elias Chushi has revealed that police have detained a 13-year-old girl of Mapalo Township in Ndola for biting off the private parts of a 4-year-old fellow female child.

According to police investigations, the 13-year-old picked the toddler from a random yard in Mapalo Township and embarked on taking the child for prayers in Chipulukusu Township.

However, passersby were alarmed by the wailing child who was also dripping blood. They effected a citizen’s arrest and noticed that the infant had bite marks on her private parts and was bleeding profusely.

Uncharacteristic of Zambian mobs which usually apportion beatings on offenders, the girl was handed over to Mapalo Police Station where she remains detained.

Meanwhile, police say that earlier in the day at 14:00 hours, Mary Kalima,40 the infants mother had reported to police of her child missing.

Meanwhile, the community of Mapalo has been divided over the incident with some saying the offender was involved in occult dark arts hence her puncturing the infant to drink blood whilst the less superstitious have alleged that the girl was insane.

(Source: Kalemba)

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Foxdale Forest – Phase 2 Selling

ZAMBIA: COVID-19 STATS

13 Apr 2021, 4:10 AM (GMT)

Zambia Stats

90,064 Total Cases
1,227 Deaths
88,077 Recovered

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