VZCZCXRO3091
RR RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN
DE RUEHLS #0244/01 0611016
ZNR UUUUU ZZH
R 021016Z MAR 07 ZDK
FM AMEMBASSY LUSAKA
TO RUEHC/SECSTATE WASHDC 4008
RUCPDOC/DEPT OF COMMERCE WASHDC
INFO RUCNSAD/SOUTHERN AFRICAN DEVELOPMENT COMMUNITY

UNCLAS SECTION 01 OF 02 LUSAKA 000244 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON EINV EFIN ZA
 
SUBJECT: ZAMBIA FEBRUARY ECONOMIC ROUNDUP 
 
 
1) SUMMARY 
 
-- CHINESE MULTI-FACILITY ECONOMIC ZONE 
-- 2007 NATIONAL BUDGET UNVEILED 
-- ZAMBIA BUREAU OF STANDARDS PUBLISHES STANDARDS 
-- CIVIL SERVANTS MISUSE K36 BILLION PUBLIC FUNDS 
 
------------------------------------ 
Chinese Multi-Facility Economic Zone 
------------------------------------ 
 
¶2. President Mwanawasa and visiting Chinese President Hu Jintao 
jointly unveiled the Chambishi Multi-Facility Economic Zone in 
Lusaka on Sunday, February 4, 2007.  Under this partnership, both 
Zambian and Chinese investors within an "economic zone" will be able 
to import materials and export products duty-free.  Zambia is the 
first African country to have a Chinese Multi-Facility Economic Zone 
that is supported by the Chinese business community and government. 
The investment in the facility will amount to approximately $800 
million in the next three years. 
 
China signed eight cooperation agreements with Zambia on Saturday 
February 3, 2007.  The two governments also signed a Memorandum of 
Understanding pledging to invest in sectors such as infrastructure 
development, to support poverty reduction and to provide more 
scholarships to Zambians. 
 
Although Chinese investment in mining, textiles and construction has 
increased in recent years, many Zambians accuse Chinese companies of 
paying low wages, ignoring labor laws, and employing Chinese workers 
for jobs that could be performed by Zambians. 
 
Source: www.zamnet.zm; www.postzambia.com; www.times.co.zm 
 
----------------------------- 
2007 National Budget unveiled 
----------------------------- 
 
¶3. Finance and National Planning Minister Ng'angu Magande presented 
the 2007 National Budget to Parliament on February 9, 2007.  Magande 
unveiled a K12 trillion (approximately USD 3 billion) budget for the 
year 2007 under the theme 'From Stability to Improved Service 
Delivery,' a measure aimed at improving living standards. 72 percent 
of the budget will be financed domestically while 28 percent will be 
externally funded.  About 75 percent will be spent on current 
expenditures, 18 percent on capital expenditures, and 7 percent on 
constitutional and statutory expenditures such as debt servicing. 
Magande said the budget was drawn from the Fifth National 
Development Plan. 
 
The main objectives for the 2007 national Budget are to achieve a 
real Gross Domestic Product (GDP) growth rate of 7 percent, reduce 
inflation to 5 percent, reduce domestic government borrowing to 1.2 
per cent of GDP and raise gross international reserves to at least 
2.5 months of import cover.  A cross section of the Zambian 
population and international community commended the budget for its 
focus on low-income groups and economic growth. 
 
Source: www.zamnet.zm; www.postzambia.com; www.times.co.zm; 
www.parliament.gov.zm 
 
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Zambia Bureau of Standards (ZABS) publishes standards 
--------------------------------------------- -------- 
 
¶4. The Zambia Bureau of Standards (ZABS) published the required 
standards for numerous products and services that have to be legally 
met by manufacturers and service providers.  The purpose of the 
publication (which is referred to as a 'declaration') is to compel 
individuals or corporate bodies to comply with legal standards.  The 
declaration relates to the product safety of 15 products and 
services, including bottled water, motor vehicles' safety 
inspections, vehicle number plates, fertilizers, beer, textile 
inspections, fruit flavored drinks, dry batteries and electrical 
appliances such as plugs, sockets, adaptors and connection units. 
All commodities in the listed categories will be subject to 
inspection by the Bureau for compliance. 
 
Source: www.zamnet.zm; www.postzambia.com; www.times.co.zm 
 
--------------------------------------------- - 
Civil Servants misuse K36 billion public funds 
--------------------------------------------- - 
 
¶5. A ministerial statement issued in Parliament by Finance and 
National Planning Minister Ng'andu Magande on the alleged misuse of 
public funds by civil servants confirmed that K36 billion (USD 9 
million) was stolen by 326 public service workers in various 
ministries between 2003-2007.  The audit revealed that some of the 
funds were misappropriated through fraudulent activities although 
over ten percent of this figure represents irregular payments of 
 
LUSAKA 00000244  002 OF 002 
 
 
housing allowances in the Ministry of Education. 
 
Mr. Magande told the House that for most of the old cases where 
investigations were concluded, disciplinary action was taken and 
appropriate punishment and dismissals were meted out to culprits. 
Many of the Ministry of Education cases involved teachers who were 
sharing housing allowances of teachers that had died or been 
transferred to other schools.  Government did not provide a list of 
those involved in the financial scams but assured the House that 
Government would continue to strictly monitor the use of public 
funds and take stern action against those abusing their public 
offices. 
 
Source: www.zamnet.zm; www.postzambia.com; www.times.co.zm; 
www.parliament.gov.zm 
 
MARTINEZ