Donors halt aid to Zambian social-welfare scheme over alleged misuse

Edgar Lungu
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LUSAKA (Reuters) – Britain and Finland have frozen funding to Zambia on suspicion that $4 million they channelled into a social welfare scheme may have been misused, the Zambian presidency said on Tuesday.

The social cash transfer scheme is a donor-supported programme under which the government relays money to vulnerable households in rural areas in Africa’s No.2 copper producer.

The British High Commissioner to Zambia, Fergus Cochrane-Dyet, said in a tweet that Britain had frozen all bilateral funding until audit results are known. “(Britain) takes a zero tolerance approach to fraud and corruption,” he said.

Officials from Finland did not immediately comment.

Presidential spokesman Amos Chanda said President Edgar Lungu ordered an inquiry three months ago into possible “misuse” of the aid funds between 2012 and now, and a number of suspects were due to be prosecuted.

“They notified us about the suspension of aid to the social cash transfer scheme but all other forms of bilateral aid are ongoing,” Chanda said. “Following the investigations, the secretary to the cabinet actually presented a report to the president on Friday.”

Lee Habasonda, a political analyst at the University of Zambia, said the withdrawal of the funding would hurt the poor in the southern African country at a time when Lusaka is struggling to manage its debt.

“We hope that the government will take quick remedial measures to ensure that the funding is resumed,” Habasonda said.

Zambia’s external debt rose to $9.37 billion by the end of June from $8.7 billion in December, the finance ministry said in August, a week after the International Monetary Fund (IMF) raised concerns over its high borrowing.