Western aid poured into Zambia when Frederick Chiluba became president and began rolling out his economic reforms programme. Now Chiluba faces corruption charges and Zambia remains one of the poorest nations.
The uncovering of high-level official corruption and plunder of public resources in Zambia has prompted the parliament to lift former president Frederick Chiluba's immunity so that he can be prosecuted. But that, analysts say, is by no means the end of the story: the government now needs to formulate policies to ensure that foreign aid is targeted at addressing poverty.
The plunder of tens of millions of dollars of public money has triggered public outrage in one of the world's 20 poorest countries – where 80 per cent of the population lives on less than a dollar a day, the World Bank definition of absolute poverty.
Zambia ranks among the highest per capita aid recipients in sub-Saharan Africa, but there is very little to show for it. Aid became significant for the economy following Chiluba's take-over from Kenneth Kaunda in 1991. The end of 27 years of one-party rule prompted donors to shower aid on Zambia – in 1991 alone aid flows increased three-fold to $1.03 billion. Meanwhile, Chiluba diligently pressed ahead with the economic reforms programme the donors wanted to see.
Now, his successor Levy Mwanawasa alleges that tens of millions of dollars, including $20.5 million earmarked for arms purchases, were diverted from public coffers for the personal benefit of Chiluba, his family and associates. The former president faces the unsavoury prospect of standing trial for corruption.
Ordinary Zambians are disgusted. Naomi Msoni, a widow with a family of nine, says, "There's so much money from donors but where does it go? There are no jobs and when we go to hospitals there are no drugs. Our suffering is getting worse all the time but those in authority are getting richer every day."
Msoni's anger is understandable: the average Zambian earns no more than $300 a year, the economy is growing at only 1.3 per cent and life expectancy at birth is only 38 years.
Has corruption cut into public funds that were meant to combat poverty? Professor Oliver Saasa, head of the Institute of Economic and Social Research at University of Zambia and an expert on foreign aid, says, "The revelations of the last few months are a source of great concern not only to us Zambians but also our cooperating partners, since they provide the bulk of funding for our poverty alleviation, development or capacity building programmes.
"The intended beneficiaries have been left out in the cold."
In a study on European aid and poverty in Zambia, published by the London-based think tank Overseas Development Institute, Saasa argues that aid programmes are not designed in close consultation with either the government or the intended beneficiaries – the poor.
Saasa feels that with such clear-cut corruption cases, donors are justified in tying aid to conditions such as good governance – something they are often criticised for because aid conditionalities are seen as a way of dictating terms to developing countries.
Mwelwa Muleya, research and information officer at the Foundation For Democratic Processes, a leading Zambian NGO, says rampant corruption dilutes the impact of the aid flows since they do not get to the poor. "If all the resources were properly accounted for and reached the intended beneficiaries we wouldn't have so much poverty," he says.
Muleya says accountability and transparency should be the cornerstone of all development and poverty alleviation programmes and stresses the need to prosecute all those found guilty of plundering public resources.
Saasa agrees, but adds: "The important thing here is not so much whether these individuals go to prison but the demonstration effect and whether donors can look at Zambia as a country where they can take their money and they are sure it will reach the intended beneficiaries," Professor Saasa says.
Prof. Michelo Hansungule, another University of Zambia academic, feels donor institutions have also contributed significantly to Zambia's high poverty levels.
Aid conditionalities such as privatisation of state industries (something promoted by Chiluba), Hansungule explains, have brought about insolvency and job losses rather than productivity and profitability. He cites the case of Luanshya – a mining town where 7,000 miners were laid off following the privatization of the Zambia Consolidated Copper mines.
"Although donors have presented themselves as poverty reducers in Zambia, they are actually one of the chief causes of poverty. Zambia is now paying the price for religiously following some of these donor guidelines," he says.
Bonnie Tembo, an NGO activist, feels aid is just as beneficial to donors as recipients. "Aid is a business," Tembo says. "It's not free and that price can sometimes be quite high."
The European Union's outgoing head of delegation to Zambia, Dr Jochen Krebbs, says Zambia has to adhere to conditionalities if it is to continue receiving aid. With the EU having set aside 160m Euros for poverty alleviation in Zambia, Krebbs says there is a need for Zambia to take bold and stringent measures – even if these lead to job losses and popular discontent.
"That is a very important aspect and not mere rhetoric," he cautions.
Mushiba Nyamazana, a World Bank economist, does not mince words either: "The government still has a lot of commitments and should work towards improving its current portfolio instead of moaning and looking for new pledges."
For Saasa, no matter how unpalatable donor conditionalities might seem, aid remains vital to Zambia's development. "We cannot discount the validity and value of aid; it must be understood and applied in the right context. The management of aid matters a lot, it's not the volume which matters but the way in which it is applied and managed," he says.
One problem, Saasa says, is that Zambia has been "spoilt" by aid – so that there are practically no high-level development or poverty alleviation programmes today that are exclusively locally funded. "Aid must be supplementary to our own efforts and not a substitute. We've tended to sit back and wait for the donors."
Saasa stresses the need to formulate appropriate aid management and application policies because, he summarises, "In spite of aid, something is not happening."