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Sunday, 26 July 2009

Foreign aid for mobile clinics

“These [mobile] hospitals will not be funded from the budget. If we were going to be getting funds from the budget in order to introduce mobile hospitals, the argument the opposition are raising will have been valid. But this is a programme a foreign government is prepared to fund and it’s their suggestion..."
President Banda explaining why the Government has embraced the concept of mobile hospitals which would cost the "foreign government" [China?] around US$50m. The President is effectively saying the money is "free" and has also promised that as well as accepting this "free aid" Government will continue its own efforts to build new clinics and hospitals. That should put a lot of minds at rest, but it still begs the question : should the government have persuaded this "foreign government" to simply give us $50m and spend it on something more beneficial? Or was it the case of foreign aid imposed?

What is clear is that the President is convinced that if the money was funded by Zambian tax payers, this would not have been the best choice. So why is it different if it is being bankrolled by Chinese tax payers? We need to be as responsible with money given to us, as we are with money raised by our taxpayers. The fact that it is "free" does not exonerate us from ensuring it is being spent wisely. It is incumbent upon us to convince the Chinese that it can be spent in a better way. If they refuse, then we know their motives are not genuine.


  1. The news circulating in Zambia initially indicated that President Banda wanted the Zambian government to acquire a US$53 million loan from EX-IM Bank of China to facilitate the acquisition of the mobile clinics from the China National Aero Technology Import and Export Corporation. And we were told by a visiting Chinese government special representative on African affairs Ambassador Liu Guijin that the Chinese government did not play any role in the US$53 million mobile hospitals deal.

    We were also told that it was an open secret that Health Permanent Secretary Dr Velepi Mtonga disregarded advice from Ministry of Health management when she wrote to the Zambia Public Procurement Authority (ZPPA) asking for authority to single-source the procurement of mobile hospitals.

    What is really going on in Zambia? I guess this is what happens in a country when there is neither transparency nor accountability in governance!

    Is President Banda Misquoted?

    If President Banda is misquoted in this news item, it would be irresponsible for him to buy such facilities when they are likely to last only a few years, given the poor state of roads in rural areas. And there are actually a lot of rural communities today where there are no motorable roads!

    Moreover, the recurrent costs of maintaining the mobile clinics would be prohibitive after spending the following amounts, which constitute the estimated US$53 million, to seal the 2-year contract:

    (a) Cost of the 9 Mobile Clinics: US$36,260,356;

    (b) Spare Parts for 2 Years: 3,300,000;

    (c) Medicine and Medical Appliance: 6,000,000; and

    (d) Chinese Engineers and Medical Staff: 5,144,650

    Besides, it is hard to imagine how the mobile clinics would be used -- would they be driven around in rural communities on a regular basis in the hope of finding a sick person? Moreover, Ronnie Shikapwasha recently told the nation that the lack of adequate medicines in healthcare institutions was partly a culmination of pilferage, and one wonders how the government will prevent pilferage of medical supplies on mobile clinics!

    The US$53 million deal, if it is actually a loan, has all the characteristics of an attempt by President Banda to use the mobile clinics (and hearses) as a campaign tool for the 2011 general elections, designed to woo voters in rural areas. It would not be far-fetched for one to assume that such a procurement is designed to reap personal or political benefits from the deal involved. I may be wrong, and I stand to be corrected.

    If he is actually not misquoted, I cannot think of any reasons why he could not ask the Chinese government to consider the prospect of providing the "free" money to cater for the following:

    (a) Provision of free healthcare for all Zambians that is respectful, that recognizes every person's dignity, and that provides for personal privacy;

    (b) Construction of more permanent healthcare facilities nationwide;

    (c) Provision of adequate medicines and medical equipment, including ambulances;

    (d) Improvements in facilities at all referral healthcare centers to make it possible for them to accommodate Zambians (including government officials) who are fond of trekking to foreign countries for treatment;

    (e) Research designed to find cures for HIV/AIDS, cancer, tuberculosis, and other deadly diseases; and

    (f) Hiring, retention and training of health personnel.

  2. Indeed it is important that we all understand the mathematics of the so-called "concessionary loan". The "concessionary" part reduces the interest rate owed to the borrower based on the principal amount of the loan. This is very nice, and does indeed qualify as a form of aid. But that is the ONLY part of the deal being "paid for" by the lender, the rest is on the borrower. A "concessionary loan" valued in US Dollars or Chinese Yuan (interchangeable for the last year in contravention of international treaties, but when two superpowers agree, who is going to argue?), is still subject to domestic economics and resulting inflation once deployed in the Zambian context. The moment the loan is converted to Kwacha and spent, the government faces the "spread" between Zambian double-digit inflation and dollar/yuan stasis to deflation (in the curent environment). This annual "spread" can be as much as 100 basis points, or 10% of the loan amount, when measured in dollars/yuan or when measured in kwacha. So the loan may be zero interest in dollars/yuan, and yet 10-12% or more when paid in kwacha due to internal inflation in part sparked by the existence of government debt. This is how Zambia got to HIPC in the first place. The way out is positive balance of trade, this is the lesson from China, or the Asian Tigers, or the Celtic Tiger, or any other growth economy in the developing world. Get more coming in than is going out, and leverage from there. As long as the opposite is the case, the nation will be at the mercy of "concessions".

  3. I suppose Musonda Mwale and FMD can now explain all this for us :)

    After all the President just contradicted their idea that this was demanded by the people.

    I am with HK that we need a clear story on this one. Someone is clearly not telling the truth.

  4. The Post has more on this :


    Reading that article it is not looking well for the President. A lot of contradictions.


