UK REFUNDED £2.7 MILLION

ZAMBIA has refunded the infamous £2,762,196.68 British donation to the Social Cash Transfer as was demanded by the Department for International Development (DFID) following some suspected financial irregularities in its administration. A transfer authorization letter to Zanaco Bank indicates that government has refunded the full £2,762,196.68 British donation to the Social Cash Transfer to DFID as requested. “Kindly transfer an amount equivalent to Two Million Seven Hundred Sixty Two Thousand One Hundred Ninety Six pounds and six five pence from Zanaco Social Protection Donor Funds Account,” the letter reads in part. Following a confidential briefing on the suspected financial irregularities by the Zambian government, the British government decided to recall its £2,762,196.68 donation to the SCT. The briefing was apparently the source of leaked information published by the British Broadcasting Corporation (BBC) and Africa Confidential alleging massive looting of donor funds meant for the poor by the Government to fund its budget deficit, while another amount was syphoned through corruption. The government which contributes 75 percent to the social cash transfer programme, briefed donors after it observed irregularities.

Kindly transfer an amount equivalent to Two Million Seven Hundred Sixty Two Thousand One Hundred Ninety Six pounds and six five pence from Zanaco Social Protection Donor Funds Account,” — Transfer authorization letter.

But on September 14, the DFID proceeded to ask for reimbursement of its money paid around December. This is the money which government had already informed the British diplomat, among others, was being held in a Zanaco account and payments suspended to allow for proper scrutiny. According to information gathered so far on the alleged financial irregularities, initially, all beneficiaries were being paid cash through Pay Point Master (PPM) which involved teachers or Social Workers who would get cash from whichever point and go to villages to pay. However, this proved cumbersome and logistically challenging because of the huge sums of cash involved and instances of payments being withheld as well as the risk of people carrying cash. It was, therefore, decided that other means be brought in to overcome the challenges, and this saw the coming in of Zampost, who signed an MoU for payment of beneficiaries at Post Offices. Zampost was initially given two provinces, Luapula and Western, to start with, but the contract was opened to other provinces after mutual agreement. According to the agreement, the Ministry of Community Development and Social Services was to draw a schedule or list of beneficiaries and the total amount to be paid plus a commission for Zampost. The first payment, for July and August which was transferred to Zampost was more than what was supposed to be paid. The ministry transferred about K27.3 million instead of K13.2 million, giving an excess of about K14.1 million. After managing the first assignment, Zampost added 3 more provinces, Northern, Muchinga and North-Western, including two districts, Mpongwe and Lufwanyama. It had also emerged that sometime in the third quarter of this year, ZAMPOST, through which payments were being made, had been over paid, a situation that led to a sequence of events almost unravelling the programme. The Ministry of Community Development had overpaid ZAMPOST by more than K14 million, instead of the K13.2 million requested. It had also emerged that when government learnt of the over payment to ZAMPOST, the President was informed as well as the donor agencies and the countries that were providing support to the social cash transfer.