The Zambia Institute for Policy Analysis and Research (ZIPAR) fears that there is a possibility of contagion by other aid donors following the revelations of alleged donor fund abuse.

ZIPAR Research Fellow Ceaser Cheelo tells Money FM News that the reports of abuse of funds amounting to about US$4 million has a direct effect as other donors may start thorough scrutiny on how their funds are used.

Mr. Cheelo says not long ago the US Embassy issued a statement to check if their money at the Millennium Challenge Account for the construction of drainages is safe saying donors want to thoroughly check if the funds are used prudently.

Mr. Cheelo says following the statement by the International Monetary Fund that there are no negotiations with the Zambian government and its decision to consequently recalling of its country representative in Zambia and the freezing of some donor aid, international capital markets gets nervous think their money is not safe.

He says this weakens the local currency as witnessed in the recent past just a week after UK, Sweden and Finland froze aid, Zambia’s kwacha depreciated by over 11%.

Mr. Cheelo says the problem with a devalued currency is that at the moment Zambia needs to raise over K11 to pay for a single dollar in repaying external debt.

And in another development, the institute has cautioned stakeholders against talking ill about the country’s economy as this has potential to affect investment into the country.

ZIPAR Executive Director Pamela Kabaso says there have been several issues discussed in the media such as the taking over of national assets by the Chinese government and freezing of aid by donors saying such things have capacity to influence investment.

Speaking during a 2019 ZIPAR Budget expectations media cocktail in Lusaka, Dr. Kabaso says such things have gravity to distract stakeholders from taking stock of the 2018 national budget promises.

The ZIPAR Executive Director said this last night during the 2019 ZIPAR budget expectations media cocktail debrief.

“Recently, debate has been raging on a number of stories that have created a lot of anxiety among the citizens and these include the alarming rumors on China collateralizing most China debt financed assets and was going to take over assets like Zesco and the recent so called UK-Aid scandal around social cash transfer scheme which has led freezing of some foreign aid from the UK, Sweden and Finland,” she said.

She notes that most budget activities need active involvement of the media by keeping a critical eye on public finance management.