13. February 2009

Corruption scandals begin to dog Banda's government

Zambians are concerned that gains made in the anti-corruption fight under the leadership of Levy Mwanawasa are being lost under the new president, Rupiah Banda. The latest scandals are over a US$40 million contract for the importation of maize, and a US$2 million consultancy contract for evaluating the telecommunication firm's assets for its partial privatisation.

When the country appeared to be running out of maize around November last year, the farmers' mouthpiece, the Grain Traders Association of Zambia, stated that they had 93,000 tonnes of the commodity and officers in the ministry of agriculture confirmed this. But despite the fact that the country is not in a food crisis and farmers still have stocks of maize the government has contracted with two private firms to import 100,000 tonnes of maize from South Africa. It claimed that Zambia did not have sufficient stocks and that the shortage was pushing up the price of mealie-meal because maize had become expensive on the market.

The revelation that there are in fact ample stocks of maize is not just an embarrassment to government but has given rise to suspicions that someone in government was setting off a false alarm with the intention of benefiting from the deals. It has emerged that government is buying at a cost of US$420 per tonne - far higher than it would have paid on the local market. One of Banda's sons, James, has been linked to one of the firms concerned. In addition, instead of supplying non-GMO (Genetically Modified Organism) maize, the suppliers imported GMOs, contrary to the position taken by Mwanawasa's government because of its implications for local agriculture.

In a second scandal involving the partial privatisation of the Zambia Telecommunication Company (Zamtel), the government did not follow tendering procedures. Against the legal advice of the attorney general, the minister of communications offered a US$2 million contract to the Cayman Island-based firm of RP Capital Partners for valuation of Zamtel's assets.

According to the Privatisation Act, the minister of communications has no right to sign the agreement, but the minister of finance, who is the principal asset holder on behalf of the people of Zambia, does. As in the maize purchase, another of Banda's sons, Henry is linked to RP Capital Partners and is reported to have organised meetings between the ministry of communications and the consultants.

Banda has defended his sons, saying they have a right to engage in business transactions in the country, and he lambasted those civil servants who leaked the document from the attorney general.
Last month Banda faced down a scandal over the importation of oil where a losing bidder was just about to be offered the contract, before the media publicized the issue.

Banda is just four months into office, and Zambians are increasingly concerned that the anti-corruption campaign of his predecessor, Levy Mwanawasa, has run into the sands. The Anti-corruption watchdog Transparency International last year noted that Zambia had made some gains in the fight against corruption and those with authority in public office were growing to some extent careful not to engage in corrupt activities for fear of being prosecuted and fired. But Banda appears to be taking two steps backwards where his predecessor made one forward. (SouthScan)

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